Source – MSN
Program Closure Amid Shifting Market Dynamics
Ford Motor Company has decided to terminate its “EV-certified” dealership program, originally launched in September 2022 under CEO Jim Farley. The program, which required substantial investments of upwards of $1 million from participating dealers to sell electric vehicles (EVs), is being phased out due to evolving market conditions and subdued growth in EV sales.
Market Realities and Program Challenges
Despite initial industry-wide optimism and high demand for electric cars and trucks, the growth in EV sales has been slower than anticipated. This reality has prompted automakers, including Ford, to reevaluate their strategies and adjust their investment plans for future electric vehicle development.
Marin Gjaja, Ford’s chief operating officer of the Model E electric vehicle business, acknowledged the shift during a media briefing on Thursday, stating, “The world has changed. The growth has slowed down.” This acknowledgment comes as Ford Motor and other automakers grapple with the complexities of scaling EV production and meeting consumer demands.
Transition to a New Approach
Ford Motor will now transition to a broader strategy by allowing all of its 2,800 U.S. dealerships to sell EVs, aiming to stimulate sales of its electric vehicles across a wider network. This shift marks a departure from the previous program, which restricted EV sales to dealers who had made significant financial commitments.
“This change allows us to expand EV sales and service to more dealers,” Gjaja explained, emphasizing the company’s strategic pivot to capitalize on a larger dealer base and enhance accessibility for customers interested in electric vehicles.
Financial Adjustments and Dealer Engagement
Under the new framework, dealers will still need to make investments in EV-related infrastructure such as charging facilities and specialized training. However, the financial burden will be notably reduced compared to the previous program, where investments ranged from $500,000 to $1.2 million per dealership. Gjaja clarified that initial cost estimates for the program were overestimated, with participating dealers averaging investments around $600,000.
Moving Forward
Ford’s decision reflects a proactive approach to adapt to the evolving dynamics of the electric vehicle market while addressing feedback and concerns from its dealership network. By streamlining access to EV sales across all dealerships, Ford aims to enhance its market position and capitalize on future growth opportunities in the electric vehicle sector.
The closure of the EV-certified program marks a significant strategic adjustment for Ford Motor as it navigates the complexities of transitioning to an electric vehicle-centric future amid fluctuating market conditions and competitive pressures.
