Is Ford Violating Franchise Laws Because of New $1.2 Million EV Requirements?

The EV market is changing rapidly. As we gather more information, things are changing. Yet Ford is rolling out new plans, which many dealers are less pleased about. Some feel Ford is violating franchise laws. Because of this, you may not be able to get a Ford EV at your local dealership.

There are new EV requirements on the horizon from Ford

A Ford logo on a blue background with a white background, which Ford violating franchise law
Ford logo | John Keeble via Getty Images

According to Jalopnik, the American automaker has a vision of what Ford could be going forward after a series of recalls and backlash from warranty work. A large part of that is centered around EVs. The problem is that Ford fully expects the dealers to invest heavily in the EV venture.

To make EVs more readily available at local dealerships, it will require training, as well as upgrades such as public chargers. This will cost dealers up to $1.2 million. That’s a considerable amount of money, and many dealers aren’t thrilled with paying that much just to sell EVs.

To smooth things over, Ford has stated that dealers can invest only $500,000. It comes with a price, however. Ford will cap EV sales to 25 per year, hampering dealers’ potential sales. 

Why some feel Ford is violating franchise laws

For those who wish to sell EVs but don’t want to invest millions, this puts a real damper on their future plans. It may also go against some state laws.

It could also be illegal because this heavily limits the types of models dealers can sell. Because of this, the Southern Automotive Trade Association has come to the aid of Ford dealers who are facing a choice between shelling out a massive amount of money or not having the option to sell many EVs.

The association has reached out to Ford with the expectation that the American automaker will be more willing to work with its dealers. However, Ford isn’t exactly thrilled with this idea and reportedly stated that many dealers think this is a positive thing. 

However, some dealers who were originally on board with the idea are now rethinking things as more data comes out. The main concern is that EVs don’t require as much upkeep as gasoline-powered vehicles in the first years of ownership. This means no major engine repairs, routine oil changes, and more. The brakes and tires will need attention, but it will still cut down dealership profit margins.

Ford’s answer is to push subscriptions to make up for the loss of maintenance income. However, many dealers understand the costs and merely want to discuss the terms with Ford.

Ford has six EVs up for sale

Related

The Ford F-150 Lightning Is Breaking More Records

Currently, Ford has six electric vehicles. The 2022 Escape Hybrid, 2022 Escape Plug-In Hybrid, 2023 Ford F-150 Lighting, 2023 Mustang Mach-E, 2023 Maverick, and 2023 E-Transit van.

The Mustang Mach-E is getting much attention from critics and consumers alike. It’s probably one of Ford’s most popular vehicles at the moment because it can go from 0-60 in a mere 3.8 seconds

The ever-popular Ford F-150 is also a popular choice thanks to the Lightning. With a starting price of $39,074, it’s not exactly cheap, but many consumers can still afford it. It can also go a respectable 230 miles on a single charge.

Each has enough potential to draw consumers in, but is it enough? The question remains whether six vehicles are enough to convince Ford dealers to spend the $1.2 million to sell them. EVs are growing in popularity, but they’ve still got a long way to go before they outsell gasoline-powered vehicles. Still, it will be interesting to see what happens next with this situation.