Ford’s E.V. Charger Mandate Shows How Broken Dealership Laws Are
Ford Motor Co. is openly chasing after Tesla, which manufactures 70 percent of all electric vehicles (E.V.) sold in the U.S. Earlier this year, Ford announced it would be restructuring its business, equally investing in both E.V. and internal combustion production, putting $50 billion into E.V.s by 2026 and considering options like online ordering and “transparent non-negotiable prices” with no unnecessary extras and no need to haggle. Tesla currently offers versions of these options.
Last week, InsideEVs reported that Ford is imposing new rules on its more than 3,000 franchise dealerships. If any dealer wishes to continue selling Ford electrics, it must pursue one of two levels of E.V. certification. The lower tier, Model E Certified, requires a dealership to install a direct current (D.C.) fast-charging station for public use. D.C. chargers, also called Level 3 chargers, can fully charge an electric car from empty in minutes, as opposed to Level 2 chargers, which can take hours. Conversely, D.C. chargers are extremely expensive and use direct current electricity rather than alternating current that comes from the electrical grid.
Ford estimates that becoming Model E Certified will cost about $500,000, nearly all of which will come from installing chargers. But even then, there would be an annual cap on how many E.V.s a dealership can sell. To avoid the limitation, a dealership must be Model E Certified Elite, which requires installing two additional D.C. chargers, plus a Level 2 charger. Becoming fully certified will cost a dealership between $1 million and $1.2 million.
If a dealership does none of the above and installs no chargers, it must discontinue selling Ford E.V.s by 2024. It can change its mind later but must opt out for at least three years. All dealerships must decide by the end of next month which choice to make.
The choice that Ford is foisting upon its franchisees is difficult. In 2020, the average dealership earned just over $2 million in profit, a sharp increase over the previous year. Now, Ford is asking its dealers to spend 25–60 percent of that total to take part in a fast-growing segment of the
Article from Reason.com