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Ford CEO Out To Convince Dealers To Offer Tesla-Like Selling Costs

Ford is seeking to make its EVs cheaper to compete with Tesla's direct sales approach.Ford Motor Company plans to lower the cost of delivering electrified vehicles to consumers by up to $2,000.

Reuters says that Ford CEO Jim Farley is in Las Vegas this week to talk to dealers. Tesla's success selling EVs without franchised dealers is pressuring incumbent automakers to revamp their retail networks, and Ford is no exception.

According to the article, the carmaker has warned dealers that new agreements will be discussed during the meetings to control how they sell the company's EVs.

Ford needs to save $2,000 per vehicle in selling and distribution costs to compete with Tesla and other EV companies who sell directly to customers without franchised dealers.

A third of the savings, between $600 and $700, would come from a "low inventory model," where buyers order a vehicle and Ford ships it to them. This would help Ford avoid weeks-long dealer lots.

Reuters said that dealers want Ford to detail minimum investments for charging stations and other EV infrastructure. Dealers want to know how quickly they must deploy chargers, which can cost up to $500,000.

Other dealers worry that a change by Ford to a Tesla-style build-to-order approach could constrain their profit margins. Dealers argue state franchise laws might offer them leverage if Ford sets fixed rates or fees for delivering electric vehicles.

GM gave buyouts to Cadillac dealers who didn't want to invest in electrification and will do the same with Buick dealers. GM has spent $274 million to decrease Cadillac dealers.

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