Ford is shaking up its electric vehicle (EV) strategy by ending its controversial EV dealership program. This program required dealers to make a significant investment, ranging from $500,000 to $1 million, in order to become “EV Certified.” However, this costly program has not yielded the desired results. As a result, Ford is opening up EV sales to its entire dealership network and removing the certification requirements.
The decision to end the EV dealership program comes after Ford overestimated the growth of EV sales. The initial program was based on optimistic forecasts that projected a surge in electric car popularity. However, the reality of the US EV market has been different. While EV sales are still on the rise, the growth rate has slowed down compared to the boom experienced between 2020 and 2022.
One of the key factors contributing to this slowdown is that wealthy early adopters, who were initially driving the demand for EVs, have become largely sated. Now, automakers like Ford are targeting a new group of EV shoppers who prioritize frugality and practicality. This shift in consumer behavior has affected the demand for EVs and prompted Ford dealers to raise concerns about slowing sales.
The dissatisfaction among Ford dealers regarding the high investment requirements for selling electric cars has been an ongoing issue. Even before the decline in EV sales, many dealers expressed their unhappiness with the steep price of entry for the EV dealership program. In fact, several dealer associations filed lawsuits claiming that Ford’s certification program violated state laws. One instance involved an Illinois board ruling in favor of dealers, further highlighting the discontent among dealerships.
The decision to end the EV dealership program is a significant move for Ford. While dealers will still need to make investments to support EV sales on their lots, they will no longer be bound by the minimum $500,000 investment requirement. By removing this barrier, Ford aims to stimulate growth in its EV sales and expand its electric vehicle presence across its entire dealership network.
Overall, this strategic pivot reflects a recalibration of Ford’s EV strategy in response to evolving market dynamics. The move not only addresses the concerns raised by dealers but also aligns with the changing preferences of potential EV buyers. As the automotive industry continues to evolve, it is essential for manufacturers like Ford to adapt and make strategic decisions that promote the adoption of electric vehicles.