Ford tweaks dealer EV rules, but more sought

Ford Motor Co. told dealers it will loosen some requirements of its electric vehicle certification program, but some who have expressed opposition to it say they still have concerns about its fairness and legality.

Changes detailed at the Ford brand's NADA Show make meeting in Dallas Jan. 28 include lowering training costs and eliminating an annual EV sales cap for some dealers, increasing marketing visibility and no longer making stores keep their chargers available to the public around the clock. Executives and dealer council officials hailed the adjustments as a positive sign of collaboration over what's become a clunky rollout of the program.

But Ford still faces legal action over the program in states such as Illinois and New York, and those involved in the cases say their position remains the same.

"Ford's changes to the EV program do not change our clients' core concerns," said Rich Sox, one of the attorneys representing four dealers in New York suing Ford over the EV certification program. The suit accuses Ford of "unlawful franchise modifications, unfair pricing requirements, margin reductions and unlawful allocation systems."

Sox, in a statement to Automotive News, said he opposes Ford's mandate that dealers offer Level 3 charging to the public, even at more limited hours, citing the "significant liability" involved. He also objects to what he calls a "one-size-fits-all list of charging and training requirements" as well as "onerous e-commerce platform" standards.

"Our clients are extremely concerned that in order to receive electric vehicles, dealers must carry out the entire vehicle sales process, including pricing and trade-ins, on Ford's e-commerce platform," he said. "This is a fundamental change to the franchise relationship and gives Ford significant control of the retail sales process."

The program requires dealers to use its Ford.com e-commerce platform for all transactions, whether they take place online or in-person at a dealership. It wants dealers to offer future EVs at non-negotiable prices without hidden fees or services.

Although enrollment for the program closed in December, Ford said it will allow dealers, on a case-by-case basis, to join the program, drop out or change their level of investment based on the newly announced changes.

Marin Gjaja, chief customer officer for the automaker's EV division, said he hopes the updates "reduce the amount of concern there might be" about the program.

"One of the things we've found is that there's a lot of misinformation out there," he said. "We need to keep working to make sure we're communicating the best we can."

Marty Milstead, head of the Mississippi Automobile Dealers Association, last week said he was concerned that Ford hadn't yet communicated the changes to dealers beyond those who attended the NADA Show meeting. But Milstead said what he heard sounded promising.

"The fact that they're looking at changes sounds like an improvement," he said. "The 24/7 charging station was something that needed to be addressed. It sounds like a step in the right direction."

Concerns remain

Milstead said the Mississippi association still has concerns and will consider lifting its opposition to the program only after it examines all the updates. The state’s Motor Vehicle Commission held a hearing with Ford late last year to determine whether the program violated Mississippi law, and the commission’s ruling is still pending.

“Once we get something to look at, we’re going to be fair about it and see if it still violates our franchise law, evaluate it and go from there,” Milstead said.

Mississippi is one of 32 states where dealer associations sent letters to Ford opposing the program, according to Tim Hovik, chairman of the Ford National Dealer Council.

Hovik said he has spent considerable time talking with company officials about the program and contacting state associations to better understand their concerns. It has been difficult to ensure the program offers perks

for dealers who invest more money in the program without subjecting dealers who spend less money to unfair restrictions, Hovik said, but he’s pleased the company has listened.

‘A fair place’

“I really believe we’ve come to a fair place,” he said after the make meeting.

The National Automobile Dealers Association played a role in brokering talks among Ford, state associations and the dealer council, according to Charlie Gilchrist, NADA’s Ford representative. 

Gilchrist, dealer principal at Gilchrist Automotive in Texas, said the sides will continue to talk.

“What I’m really proud of is that we’ve had that open dialogue,” he said. “I think Ford is genuinely listening and trying to make changes that will be proactive to help both them, us and our customers. It’s a work in progress, and I think as long as we keep that dialogue open we’ll come to a good outcome.