Image of the article titled Ford wants to compete with Tesla, but its dealers get in the way

Photo: David tracy

Ford Motor Company is seriously considering offering more electric cars in its lineup. The Ford Mustang Mach-E and the next one F-150 Lightning are awesome products. However, the company’s approach to actually selling these products leaves some customers frustrated and looking elsewhere. While short term sales look good right now, the long term impact may not be.

The first problem is that on these electric vehicles, Ford has switched to what he calls “e-bill” pricing; this means the invoiced price (or dealer cost) and MSRP are the same. Usually, the prices that dealers charge are lower, which allows dealers to offer offers below the MSRP, which is just not as clear or straightforward for a consumer, who may prefer to pay the price of the car. car instead of worrying about getting the best deal. Whether Ford admits it or not, with this “e-bill” pricing, it seems to be taking a page out of Tesla’s playbook where everyone pays the same price for a car. If you buy a Tesla, the price online is what you pay. No games, no croupier nonsense. Except that despite Ford’s “electronic bill” pricing, dealerships can play games and tag cars well. more the MSRP. recently reported that Ford is implementing a program where dealers can ‘poke’ each other if a dealership announces the next Lighting below MSRP. Well advertising more the sticker price is perfectly correct, however; the “voluntary” program says a dealership can sell a car for whatever it chooses, but it only tries to discourage advertisements that indicate a level of economy.

I have participated in several Mach-E offers for various customers in different parts of the country, and although there are vehicles for sale at MSRP, I saw over $ 10,000 on the sticker. There are even dealerships that put a profit margin of over $ 33,000 on these cars.

Image of the article titled Ford wants to compete with Tesla, but its dealers are opposed

Screenshot: Bowen Ford Scarf

Image of the article titled Ford wants to compete with Tesla, but its dealers get in the way

Screenshot: Ford

(Update, Bowen Scarff Ford contacted me. To clarify the above markup –

“But just to clarify, the Mach-E you refer to in the article for 33,000 above MSRP is our dealership demo model and is not for sale but available for a test drive before people do place a factory order. We honor all of our MSRP orders in our store. Our manager put a crazy price on this specific model to prevent people from calling him all day. We made them remove the price for don’t let that give a bad impression. ”)

There is a lot of demand and not enough supply. When these factors are in place, sellers can charge whatever they want. However, earlier in the summer, Ford Director of Communications Mike Levine sent a tweet in response to a customer’s frustration with dealer markups.

Image of the article titled Ford wants to compete with Tesla, but its dealers get in the way

Screenshot: Twitter

I was curious as to exactly how Mr. Levine, or the Ford Company for that matter, planned to apply any kind of “policy” that would deter dealers from selling these cars at MSRP. I have contacted him several times for clarification on the matter, but have not received a response. I received a response from Emma Berg, Ford’s director of communications for electric vehicles:

“If a customer is not happy with their dealership, our team can help them find another dealership that is better suited to them. Dealerships are independent franchises and, ultimately, the final price that a customer will pay for any vehicle is agreed between them and a dealership.

I fully understand the franchise agreement and that dealers can sell whatever they want. While I think it’s great that Mr. Levine has been personally active in communicating with dealers on behalf of customers, it’s also not a good look for the brand when your PR representative has to be a intermediary between the customer and the retailer.

There are ways to limit these practices if an automaker was really serious about it. In 2014, Dodge implemented a plan to limit Hellcat mark-ups and tie future vehicle allowances (that is, the number of cars the manufacturer would send to the dealership) to the rate at which dealerships sold. the first series of Hellcats. While Ford can’t dictate what a dealership can sell a car for, it may be able to tie future allowances for other in-demand cars based on the number of vehicles a dealership sells at or below MSRP.

The other problem is that when it comes to leasing Ford electric vehicles, renters cannot take advantage of tax credits as part of lower car costs. Ford Financial Services will not pass on this discount. Several brands use the Federal Electric Vehicle Tax Credit as an initial lease rebate. For example, if you lease the ID4 from VW, which like the Mach-E has no margin between the invoice and the MSRP, you get the $ 7,500 discount, which makes the VW lease much more. competitive than a similarly priced Mach-E.

Right now, demand far exceeds supply, creating a market where sellers have leverage, but that won’t always be the case. Tesla has attracted customers not only because of a compelling product, but because people don’t want to buy cars with the typical dealership hassle. If Ford and other traditional automakers want to compete in this space, it is not enough to offer electrified vehicles. Automakers are going to have to find a way to work with their dealers so that the sales process doesn’t send electric vehicle customers to competitors.


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