Ford adjusts EV standards, ups training with dealer feedback

Ford Motor Co. is upping its investment in electric vehicle training and demo models for dealerships and dropped an idea to give EV buyers a seven-day return option after executives solicited extensive feedback from retailers.

The automaker is largely sticking with its plans to have dealerships sell EVs using a new set of standards that would involve them keeping no inventory on-site, setting nonnegotiable prices and offering customers the ability to complete their purchase online.

Company executives say they have adjusted their thinking on some aspects of the customer experience after more than two dozen gatherings with dealers across the country but assert that some of their goals have been misinterpreted. They noted that dealers will retain the ability to set their own prices and operate physical storefronts even with online sales.

According to Ford executives and dealers familiar with the discussions, Ford entered the talks floating the concept of a one-week buyback period for EVs. It abandoned the idea after dealers warned that it could run afoul of some state regulations and result in a nonuniform policy depending on where a vehicle was purchased. Retailers also have prompted the automaker to commit more investment in demo vehicles and training programs than it initially expected, and to revise how it is approaching EV warranty guidelines.

"We don't have people in a room as bobbleheads nodding in agreement," Richard Bazzy, owner of three Shults Ford stores in Pennsylvania and a member of a dealer advisory subcommittee on EV standards, told Automotive News. "It can be spirited, passionate, but absolutely everybody's willing to be adaptable. We're focused on the customer experience. That drives everything."

Andrew Frick, vice president of sales, distribution and trucks for Ford Blue and the company's chief liaison with dealers, said he has talked about the standards with around 300 retailers in 25 different meetings, some of which have lasted as long as four hours. In addition to meetings with the dealer council and the advisory subcommittee, Ford has discussed the changes with groups of about a dozen dealers at the regional market level in both the U.S. and Canada. Frick said the company also has met with smaller rural dealers to hear their concerns.

Despite the discussions, many details of the program have not been finalized. For example, it's unclear how Ford will implement nonnegotiable pricing or how much dealers will have to invest, although Frick said the final number will vary based on store and market size.

"We've received some really good input," Frick said. "The dealers are encouraged and engaged."

Ford CEO Jim Farley, speaking this month at the Bernstein Strategic Decisions Conference in New York, said he expected Ford to offer a better retail experience than Tesla and other direct-sales startups.

"I think our dealers can do it, but the standards are going to be brutal," he said. "They're going to be very different than today."

Farley specifically mentioned nonnegotiable pricing and "100 percent online" sales, but Frick clarified to Automotive News that Ford has no plans to eliminate physical stores or a customer's ability to purchase an EV at a dealership.

Farley's "100 percent online" comment was about "a single point of entry, whether you're physically in a dealership or at home," Frick said. "We want to leverage their physical existence and leverage their service capacity."

Similarly, Bazzy said discussions with the company have mostly centered around offering customers a choice.

"We don't expect everybody to transact online; probably 80 percent won't transact online," he said. "But we'll have that online presence to go in and build the car as far as they want to go."

Ford wants to remove negotiation from the process but will not control the price dealers charge for EVs, according to Marin Gjaja, chief customer officer of Ford Model e.

"The dealer will set the price," Gjaja said. "The goal is to eliminate one of the biggest sources of dissatisfaction for customers right now around feeling not sure they got a good deal and feeling like they need to negotiate."

Part of Ford's goal in crafting a different set of standards for EVs is to better compete with companies such as Tesla and Rivian. Farley said in March that selling directly to consumers makes Tesla's cost per vehicle average about $2,000 less than Ford's.

One way to close that gap, he suggested, is to not advertise EVs.

"Now, it's early days, it's first inning, second inning maybe, but I'm not convinced we need public advertising," Farley said. "If you ever see Ford Motor Co. doing a Super Bowl ad on our electric vehicle, sell the stock."

Gjaja said Ford won't necessarily eliminate TV commercials or other traditional ads, but it doesn't see a point to spending money on major ad campaigns at a time when most of its current EVs are sold out.

"We've generated such demand for these products that driving more awareness would just be a bad investment," Gjaja said. "We'd rather invest that in the customer experience and the product."

After Ford gets through the initial phase of selling EVs, he said, it's likely to advertise in some form. In fact, the automaker currently is running ads highlighting its EVs' front storage capabilities.

Ford expects to formally introduce its full sales standards in September, and they would take effect in 2024. Its roughly 3,100 U.S. dealers would have to participate in the program in order to sell EVs after that.

The company expects to continue meeting with dealers in the coming months to work through details of the program before rolling it out to the broader network.

Bazzy said he's been optimistic about the changes since a gathering of Ford's top-volume dealers in March, when Executive Chair Bill Ford Jr. joined Farley on stage to reassure retailers that the company is committed to the franchise model.

Charlie Gilchrist, dealer principal at Gilchrist Automotive in Texas, said he has participated in three meetings tied to the EV standards in recent months and has been encouraged by the process.

"They're taking basically a clean sheet of paper and trying to figure out, together, how we can be more effective and efficient to provide these vehicles to our customers," Gilchrist said. "I expect they will come up with standards the dealers can embrace."