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Ford’s $1.2 million EV certification faces major opposition from dealer associations

Dealer associations claim that Ford Motor Company is breaching some franchise regulations and unfairly burdening its retail network with expensive restrictions for the sale of electric vehicles in at least 13 different states.

One of CEO Jim Farley’s signature initiatives requires dealers to invest up to $1.2 million on chargers, staff training, and new sales standards to overhaul the retail experience has been the subject of a letter from state officials in Pennsylvania, Virginia, North Carolina, and others asking Ford to make significant changes.

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.

Virginia “passed laws years ago to make it abundantly clear that if you’re a dealer, then you’re entitled to your fair share of mix and quality as any other dealer is of your size,” said Don Hall, CEO of the Virginia Automobile Dealers Association. “It should be market-driven rather than a mandate.”

EV competition Don HallMore: VADA Pres. Don Hall on EV competition: ‘Let the franchise system prevail’

Ford pushed back stating, “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.”

Dealers will need to invest a minimum of $500,000 and a maximum of $1.2 million to join. However, in theory, those businesses will have the upper hand since they will be the only Ford dealers permitted to offer new electric vehicles from the manufacturer starting in 2024.

Ford unveiled at its annual dealer gathering in Las Vegas last month, that they are giving dealers three options between Jan. 1, 2024, and Dec. 31, 2026. They can decide not to sell EVs. Or they might choose to meet the requirements for the “Certified” and “Certified elite” levels.

The program won’t require dealers to enroll, and if they choose to hold out, they will have another opportunity to do so in 2027. The deadline by which all partners had to select which alternative they would choose, was originally October 31. The carmaker only recently delayed that day to December 2 in order to offer dealers additional time.

“We value our relationship with our dealers and have decided to provide additional time for our dealers who have not decided or asked for more time,” said company spokesperson Marty Gunsberg.

All in all, there is still some back and forth between dealers and Ford. The coming days are sure to bring about more clarity for dealers regarding what the future will look like depending on which avenue they choose to take with Ford.

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