On the surface, Ford telling dealers they have to spend upward of $1.3 million to join a new program so they can sell electric vehicles seems, well, nuts.
These are franchised dealers whose sole reason for being in business is to sell Ford vehicles. That’s what they do. Now they have until Dec. 16 to decide whether to pay extra to sell EVs? That seems nuts until you consider where that money is going: into their own stores.
Mirroring a simi- lar plan in the United States, there are two member- ship programs that Canada’s 440 deal- ers need to consid- er. They both begin in 2024 and they’re tiered, as you might find for a member- ship with Spotify or your local gym. The first program, called Model e Certified, costs about $560,000 per rooftop, according to Ford, and provides deal- ers with what could be termed as basic access to EVs to sell.
The second tier — the $1.3-million program aptly called Model e Certified Elite — gives dealers full membership access to EVs to sell as well as to internal combustion vehicles, like they have now, actually. Dealers who don’t want to join either program can sell only internal-combustion vehicles.
More details on the programs are in a Page 1 story, but what’s missing is why Ford is taking this approach. Automotive News Canada did not get that answer, but I’m going to take a stab at it: Dealerships are going to have to spend money on infrastructure and training to sell and service EVs, so Ford just formalized that and gave it a name.
Toronto Bureau Chief David Kennedy likened the approach to that of McDonald’s restaurants: No matter where you are, a Big Mac tastes like a Big Mac. He might have said cheese- burger, but the point is consistency.
Better that than the alternative: Dealers, unsure of what, exactly, to invest in, spending money on the wrong things. A standardized approach — doing things the Ford way, just as the franchises have always done — is the best way to get all the dealers on the same page and moving in the same direction, and to keep a certain standard of sales and service across the country. (Ford, if I missed the boat, you can certainly call me out.)
According to a Ford spokesman, about 90 per cent of the program money will go for infrastructure, which is a good thing. We did not find out what the other 10 per cent is for, but training, administration, communica- tion and overhead would not seem out of the ordinary.
Where this comes off the rails a bit is the amount dealers pay should be a variable, reflecting their markets. Perhaps the amount should be based on total sales, because there’s no way that a small Ford store in a rural area needs the same (90 per cent of) $1.3-million infrastructure as a large-market store.
“Ford has to be open-minded,” said Steve Chipman, CEO of Manitoba- based Birchwood Automotive Group.
“One size doesn’t fit all.”
Indeed.
Chipman said he’s upgrading his stores for EVs anyway (Birchwood has 24 dealerships representing 22 brands, including three rural-Manitoba Ford dealerships and one in Winnipeg) and is taking the new Ford programs in stride as part of the cost of running a franchise.
But Ford must be on the right track, because other brands are quietly watching how this is playing out. They know that they will need to prepare a similar strategy to ensure Big Mac (or cheeseburger) consistency of EV sales and service and that their retailers are on the same path and spending money on the right stuff. How will Stellantis or GM Canada or Honda handle the same issue? We’ll probably find out soon enough.
In the meantime, Ford is likely to keep getting blowback from dealers — especially in the United States — but the first one through the wall always gets bloody.
