Dealer associations in at least 13 states say Ford Motor Co. is unfairly burdening its retail network with costly requirements for electric vehicle sales and breaking some franchise laws.
Officials in Pennsylvania, Virginia, North Carolina and other states have written to Ford calling for significant change to one of CEO Jim Farley's signature initiatives, which would require dealers to invest up to $1.2 million on chargers, staff training and new sales standards to overhaul the retail experience.
Dealers can choose to spend $500,000 instead but would be allowed to sell no more than 25 EVs a year. Some of the state associations contend that such a cap is illegal.
The program "fails to make all vehicle models available to dealers on comparable terms and fails to allocate equitable quantities of EVs to Ford franchised dealers relative to their assigned market areas," members of the Southern Automotive Trade Association Executives, which represents 12 state dealer associations, said in a resolution.
The group called on Ford to "work with state association executives and franchised dealers to create a program that complies with the state laws, promotes competition and furthers the goal of EV adoption in all parts of the country."
John Devlin, CEO of the Pennsylvania Automotive Association, said in a letter to Farley that the certification program "violates multiple provisions of Pennsylvania law."
Ford told Automotive News it's confident the plan is legal and that "overall feedback has been positive."
"The Model e Electric Vehicle Program was designed to deliver an unparalleled purchase, service and ownership experience for customers," a Ford spokesperson said in an email. "Ford engaged with and listened to around 400 dealers in developing the program, which provides flexibility both in terms of enrollment level and timing.
"Dealers may also choose not to enroll in the voluntary Program and specialize in Ford’s industry-leading ICE portfolio of retail and commercial vehicles."
The automaker set an Oct. 31 deadline for dealers to select their investment level but postponed it to Dec. 2 after dealers asked for more time. Dealers can decide to not participate but would be limited to selling only gasoline and hybrid models starting in 2024.
Tim Hovik, chairman of Ford's National Dealer Council, said he understood the state associations' positions and suggested that the program still can be modified before taking effect. He noted that Ford held dozens of meetings with dealers whose stores vary in size to try to craft the best possible solution.
"Council is — 'supportive' might be too strong a word — but on board with where the company's going," Hovik told Automotive News. "The evolution of where we finished versus where we started was a direct result of dealer input. We've got a really good blueprint, but there are a couple flies in the ointment that we're going to have to work our way through. I feel there are pieces of what we rolled out that are very useful and can be effective, but I also think there are a lot of pieces that can have tweaks."