We all know the dealership system is broken. New car listings are replete with markups, and buyers that can even find a reasonably-priced car are still subject to scams and fraud. So when a manufacturer tries to rein in its dealers with new rules, the result is generally an improvement — but Ford, with its new EV initiatives, may have gone a step too far.
Ford announced last week that it would bifurcate the Blue Oval, with Ford Blue handling ICE vehicles and Ford Model E working on EVs. With that split comes a wealth of new rules for dealers, regarding the ways in which they can and can’t sell electron-fueled Fords. Automotive News has the details, emphasis mine:
The automaker plans to create the blueprint in tandem with dealers and won’t finalize details until after they provide input over the next few months. But executives have outlined some of what they want to include: a commitment to carrying no inventory, selling at nonnegotiable prices and operating with scaled-down facilities.
Making the move to a more digital method of car buying is unequivocally good — nearly 30% of 2020 automotive sales were done online, so it’s clearly something consumers want. But, whether due to impatience or urgent necessity or simply a lack of care for the fine details of a vehicle, average car buyers also want to buy cars that are currently in inventory. The current car market is heavy on orders, since nothing’s sitting out on dealer lots, but back in 2015 only five percent of new cars were custom ordered.
When dealers sell ICE vehicles side-by-side with EVs, but will only sell electric vehicles to buyers who place a factory order, there’s a natural incentive for people to pick the gas burner. They can see the car in person, feel the interior, actually drive it — and the dealer has an incentive to get a car off its lot so something new can take its place.
Changing the way dealers work is an admirable goal for Ford to pursue. But by placing limits on the way EVs can be sold, without doing the same to ICE vehicles, the company could be kneecapping its most forward-looking models. To buyers on the EV fence, that alone could push them over to the ICE side — markups or no markups.