Ford CEO Farley challenges dealers to cut EV cost to customers by $2,000

[Administrator]

https://www.autoblog.com/2022/09/09/ford-jim-farley-dealers-las-vegas-customer-ev-cost-cuts/

Ford's Farley will challenge dealers to cut EV cost to customers by $2,000
It needs to happen to stay competitive with Tesla, but some dealers may balk

September 9, 2022. DETROIT — Ford Motor Co Chief Executive Jim Farley will go to Las Vegas next week to roll the dice on a strategy to convince dealers to cut as much as $2,000 from the cost of delivering an electric vehicle to a customer.

Ford has told dealers that one key topic for the meetings will be a discussion of new agreements that would govern how dealers sell Ford's expanding lineup of electric vehicles.

Farley told analysts in July that Ford needs to cut $2,000 a vehicle out of selling and distribution costs to be competitive with Tesla Inc and other electric vehicle startups that sell directly to consumers without franchised dealers.

Full article:
https://www.autoblog.com/2022/09/09/ford-jim-farley-dealers-las-vegas-customer-ev-cost-cuts/

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[Maxx]

Tesla is not making trucks and folks are selling their EV trucks for thousands more than they paid for. It is a tough sell.

 

[Yellow Buddy]

Seems kind of odd to raise prices by 5-7k then say the dealers need to cut $2000...

 

[greenne]

Seems kind of odd to raise prices by 5-7k then say the dealers need to cut $2000...

Not really..the $5-7k increase is a cost at the production level(Ford). What Farley talks about is dealers cutting costs of $2k at the local sales level.

Whether asking dealers to cut their slice of pie will work remains to be seen....

 

[Roy2001]

Just get rid of them from EV order/sale procedure and let them function as delivery centers.

 

[lancersrock]

Just get rid of them from EV order/sale and let them function as delivery centers.

They would if they could

 

[Pioneer74]

I don't see where this $2000 is supposed to come from the dealers. Invoice price and MSRP are the same on Lightning and Mach-E.

 

[GDN]

I don't see where this $2000 is supposed to come from the dealers. Invoice price and MSRP are the same on Lightning and Mach-E.

That is true, but the dealer earns up to 10% for the MSRP in profits regardless of what invoice says. We all know that invoice price has been funny money for years.

 

[GDN]

From what I was told Ford is prepping their systems for direct sales pretty much. When I went in to get my $500 deposit refunded - the guy told me it was really easy in the new customer portal. He said he wasn't sure if they were going to open it for 2023 or not, but from what he knew it was set so that the customer could get final sales numbers and pay online before the vehicles were delivered. This would be a huge step in the right direction.

 

[DrZoidberg]

Not really..the $5-7k increase is a cost at the production level(Ford). What Farley talks about is dealers cutting costs of $2k at the local sales level.

Whether asking dealers to cut their slice of pie will work remains to be seen....

Show me the production increase of $8500 for lariat. I don’t buy it.

invoice and msrp are identical. So again, why should the dealer take a hit?

 

[greenne]

Show me the production increase of $8500 for lariat. I don’t buy it.

invoice and msrp are identical. So again, why should the dealer take a hit?

Obviously you haven't shopped for battery minerals lately. Not saying the costs have gone up $8500 for Ford, but I'm fairly certain they have gone up significantly. (Parts, supplies,etc)

Not to mention increased shipping costs, energy costs at the factory, etc. That all gets passed on to the consumer.

 

[Pioneer74]

Show me the production increase of $8500 for lariat. I don’t buy it.

invoice and msrp are identical. So again, why should the dealer take a hit?

 

[GDN]

Show me the production increase of $8500 for lariat. I don’t buy it.

invoice and msrp are identical. So again, why should the dealer take a hit?

I'm not arguing prices going up, but noted above - the invoice and msrp being equal holds no water these days. Especially for the MachE and Lighting.

 

[Maxx]

So again, why should the dealer take a hit?

Because customers are now comparing Ford purchase experience with Tesla and Rivian. They didn’t have those options in the past. Once it is evident dealers at the point of sale bring more stress than value to the table, it is only a matter of time before state laws catch up. So it makes sense dealer function match the value and the need sooner rather than later. They could work with Ford now or become irrelevant later. I would not be surprised if Ford is sweetening the deal for dealers in ways we don’t hear about by promising to extract more money from owners after the sale and giving the dealers a cut. Dying to see the code to see if there is a timer with ”Critical xxxx warning, service soon“ message in there.

 

[DrZoidberg]

Guess I didn't realize how bad lithium got. What bargain for 2023. 8500 more and no credit.

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