Ford is revising its electric vehicle (EV) dealership program that asked store owners to invest upward of $1 million to sell the vehicle.
The “EV-certified” program was announced in September 2022 amid high demand for the vehicles, low supplies and industry-wide optimism for all-electric cars and trucks. But while EV sales are growing but at a far slower, the automaker is change course when it comes to dealers investing in infrastructure at their lots.
“The world has changed,” Marin Gjaja, chief operating officer of Ford’s Model E electric vehicle business, according to a CNBC story. “The growth has slowed down.”
Ford Changes Course
The move comes after Ford told dealers last month they could pause capital investments related to selling EV until the company completes a review of its requirements.
The automaker had set a June 30 deadline for dealers to invest in Level 2 EV charging stations to qualify for its Model e certification program to be able to sell EVs.
The decision comes after Ford executives completed a “Dealer Engagement Tour,” hearing from more than 1,000 dealers over 11 meetings across the country.
EV Growing Pains
This is the latest delay for its EVs for the Detroit car maker that started last November when it delayed the launch of a three-row SUV by two years, in light of slower-than-expected growth of EV sales because of affordability concerns, lack of charging access and other barriers.
The automaker has delayed $12 billion in EV-related spending as a result of slowing EV sales growth. Its Model e business division expects to lose up to $5.5 billion in 2024.
When it comes to the certification program, the automaker in November 2023 said for dealers to be “certified” in the EV program, they had to have two Level 2 chargers, down from five, by the end of next month what officials said was a response to market conditions, dealer feedback, supply chains and infrastructure delays.
Open to All Ford Dealers
Gjaja said the Model e Dealership Program, which included about half of Ford’s 2,800 U.S. dealers, “is being sunset” as the market undergoes changing conditions and amid conversations with dealers. The company had faced lawsuits from dealers over the program.
Instead, Ford will open EV sales to all of its dealers in an attempt to grow sales of its all-electric cars and trucks. Dealers will need to make some investments for charging, training and other EV-related expenses, but not as much as they did under the prior program.
Ford officials said dealers who participated in the full program invested about $600,000 on average.
“It allows us to open EV sales and service to more dealers,” Gjaja said. “We think it’s going to help us grow our sales.”
