Ford Dealers Told To Prepare For A Brutal Future

“We’ve got to go to a non-negotiated price. We’ve got to go 100 percent online. There’s no inventory, it goes directly to the customer. And 100 percent remote pick up and delivery,” said Ford CEO Jim Farley. 4

He was speaking at Bernstein’s Annual Strategic Decisions Conference. Farley is talking about how he wants the Ford Motor Company to sell electric vehicles like the Ford F-150 Lightning and Mustang Mach E.

The CEO has been at odds with the traditional factory-dealer-consumer buying process, one that’s been in place for as long as anyone can remember. But the pandemic, supply shortages, and outrageous dealer markups have brought the pitfalls of that system to light. Now, Farley is looking to change that, if only for Ford’s electric models.

However, Ford is not going to make all of its dealers disappear overnight. Dealer owners have a huge say in how things get handled at Ford, despite often being at odds with the company. Instead, Farley says dealers have to adapt or die. He sees physical dealer locations as an edge over competitors, but the standards for evolving to fall in line with Ford’s new vision “are going to be brutal.”

Despite that, the fixed-price model isn’t new, especially when it comes to electric cars. Tesla arguably pioneered the model, despite its ambiguity on pricing at times. The same could be said for Rivian, which has fought long and hard to sell cars direct to consumers where it otherwise wasn’t legal, like in Georgia.

In short, buyers of electric vehicles expect to see a price, know that’s what they’ll be paying, pay it, and have their car show up either at home or at the dealer. Nothing more, and certainly nothing less.

Oddly enough, Farley also took an interesting stance on advertising for the Blue Oval’s electric vehicles. He said at the conference that the brand is going to massively scale down its electric vehicle advertising initiatives. He didn’t elaborate much beyond that, simply saying “If you ever see Ford Motor Co. doing a Super Bowl ad on our electric vehicles, sell the stock.”

This could perhaps be attributed to electric buyers’ expectations and perceptions of the vehicles they’re interested in. Maybe these buyers prefer their vehicles to be differentiated from traditional forms of advertising and selling. It would certainly explain why Ford plans to cut down adverts for its EVs.