Roughly two-thirds of Ford’s 3,000 dealers in the U.S. have agreed to a new sales practice for electric vehicles, that would prevent buyers from having to negotiate on the price of a vehicle. Jim Farley, the automaker’s CEO, said that the move would mark an important step in its goal of becoming the country’s top EV manufacturer.
Ford has been working to implement non-negotiable sales prices since at least June, when Farley laid out the tenets of his vision for the company’s future. The move, he believes, will help the automaker compete against startups like Tesla, Rivian, and Lucid that have a direct-to-consumer sales approach.
Read: Ford CEO Wants To Sell EVs Online-Only With Non-Negotiable Prices, Rethink Advertising
In the summer, Farley said that the Ford had to “go to non-negotiated price. We’ve got to go to 100% online. There’s no inventory [at dealerships], it goes directly to the customer. And 100% remote pickup and delivery.”
Not All Dealers Are Onboard
As Business Insider reports, the Blue Oval wants to encourage customers to make more factory orders for lower-priced EVs, and it wants dealers to invest in EV charging stations and other infrastructure upgrades. Despite the majority of dealers agreeing to the company’s proposed sales tactics, not all are onboard.
A number of Ford dealers in New York filed to sue the automaker last week, claiming that the company’s EV sales requirements violate franchise laws with illegal pricing requirements and allocation systems.
Ford, though, says that it believes its programs are lawful and Farley said that the company is working to include dealers in its future. That’s as opposed to startups like Tesla that sidestep dealers altogether.
“We’re betting on the franchise system,” Farley said. “We want to work with our dealers, but there are certain things our customers want that are non-negotiable.”
To receive electric vehicles, dealers can either choose to upgrade to the Certified or the Certified Elite program. For the former, dealers need only invest around $500,000, but are only allotted 25 EV sales per year. The Certified Elite track, meanwhile, sees dealers investing up to $1.2 million for facility upgrades, but will be allocated more EVs. Farley said that the majority of dealers who signed up to the Certified program, opted for the Certified Elite option.