I read an article by Jalopnik which echoes what I’ve been saying for some time now. If Ford, or any legacy automaker for that matter, really wants to compete with Tesla, the dealers need to get out of the way. I’ve written about this extensively. For example, in Connecticut, a local paper, The Day, published an opinion piece basically begging Tesla to play by their rules. By “their,” I mean dealerships’. Don’t lobby to make direct sales to customers legal, don’t force dealerships to compete for their business without lifting a finger.
In my interview/podcast with Connecticut State Senator Will Haskell, he said something that kind of led me to the realization of exactly why dealerships don’t want to compete with Tesla. Dealerships have been the only way you could purchase a new car for decades. Tesla is forcing them to change, but instead, they are fighting that.
I’ve also touched upon the dealership experience — not my own, but those of others. And this is the focus of the Jalopnik article, which stated, “It’s one thing to have a product that competes with Tesla, it’s another to have the sales experience. And Ford’s old dealership model isn’t helping.”
The article explained that Ford is serious about EVs and adding more to its lineup, but that its approach to actually selling them is leaving customers frustrated and looking elsewhere for their EVs. The author pointed out that the first issue is that Ford has moved to what it calls e-invoice pricing, which “means that the invoice price (or dealer cost) and MSRP are identical.” The author explained further: “Usually dealer invoice pricing is lower, allowing dealers to offer deals below MSRP, which just isn’t as clean or simple to a consumer, who may rather want to just pay what the car costs instead of worrying about getting the best deal. Whether Ford will admit it or not, with this ‘e-invoice’ pricing, it seems to be taking a page from Tesla’s playbook where everyone pays the same price for a car. If you buy a Tesla, the price online is what you pay. No games, no dealer nonsense. Except, despite Ford’s ‘e-invoice’ pricing, dealers can play games and markup cars well over the MSRP.”
The author even has his own dealer story, kind of. Having assisted with several Mach-E deals for numerous customers in different states, he’s seen upwards of $10,000 over the sticker price.
The author shared a screenshot of a tweet from Ford’s Mike Levine quote tweeting Ross Gerber, a friend of mine, who was complaining about poor dealer practices — dealers selling Mach-Es well above MSRP. The author reached out to Mr. Levine but never got a response. However, Emma Berg, the director of Ford’s communications for EVs, said:
“If a customer isn’t happy with their dealer, our team can help them find a different dealer that’s a better match. Dealers are independent franchises and ultimately the final price a customer will pay for any vehicle is agreed between themselves and a dealer.”
In other words, dealers are presenting a problem that Tesla always assumed they’d present if Tesla had to sell cars through them instead of directly to customers.
Another issue the author touched upon is a leasing issue. Lessees are unable to take advantage of federal tax credits to cut down own costs because Ford financial services arm will not pass this credit on to them. He cited an article from Cars Direct which further explained, “When you lease a new EV the tax credit still applies, but since it stays with the original owner, most OEMs don’t pass on the credit when you lease. Instead, they keep the credit, like Ford is doing with the latest Mustang Mach-e, which qualifies for a full $7,500 credit. This may affect the lease price on certain EVs, since some manufacturers do choose to pass on the savings, like VW which offers a $7,500 zero-emission bonus for lessors on its 2021 ID.4.”
I think that the author has a very valid point here when addressing the fact that dealerships are getting in the way of Ford success selling EVs. It’s easier to buy a Tesla than a Mach-E or other legacy automaker EV, even in states that ban direct sales. You can simply go online, buy it, and then be done. The next step is the delivery process. There are no hidden fees, no price haggling, no one telling you that you need to pay $1,000 for locking lugnuts, and even worse.
There are no paperwork fees, no ill-informed sales people who know nothing about the car nor have any interest because they don’t make any money from it. There’s none of that.
The author of the Jalopnik article penned a very well written constructive feedback piece for Ford, and I think that if Ford is serious about EVs (and it seems to be, somewhat), it will not only accept the criticism, but actively try to find a solution that will benefit its customers who want to buy a Mach-E.
Keep In Mind…
With that said, Ford needs to understand why dealerships don’t want to sell their Mach-Es or compete with Tesla. I’ve summarized this before in another article:
“The reason why dealerships don’t want to compete with Tesla or any EV manufacture that sells directly to the customer is that they don’t want to have to fight for something they are used to getting easily.
“Up until Tesla, the only way to buy a car was through a dealership. With Tesla and other EV manufacturers such as Rivian and Lucid coming to the States, dealerships are now having to fight or compete for something they are not used to having to fight for. They have to fight for their piece of the pie, so to speak.
“Before Tesla, dealerships could get away with screwing customers over, because if you wanted a car, you literally had no choice but to go to a dealership (unless you bought a used car from someone). If you wanted a new car, you go to the dealers. It’s always been this way.”
Ford, you’re working with a model that is used to getting what it wants and being the only access point for customers. This model doesn’t want to change or accept the fact that things are changing. This is what you’re working with, and it’s working against you. I’m sure you know it, but if you want to succeed, I will add to the growing number of voices asking you to find a way for that model to work in your favor or to eliminate the model itself.