Ford boss Jim Farley has spoken to dealers about a new strategy to reduce the cost of its electric cars. The brand then wishes to be able to beat Tesla at its own game.
Today, all manufacturers must massively electrify their range, while the sale of thermal cars will in any case be prohibited in Europe from 2035, as in California. But if most brands have at least one electric car, this type of engine is not always very profitable. And not all manufacturers have the same strategy to get by and make more money.
Compete with Tesla
Indeed, Porsche for example, points out that it is easier to increase the prices of electric cars and thus to gain in profitability. An approach not necessarily adopted by all, and especially not by Ford. Indeed, the boss of the brand, Jim Farley rather wishes to take the opposite route, by lowering the prices of his vehicles.
Relayed by the American agency Reuters, the leader indeed wished, a few days ago, to discuss with his partners and dealers, in order to lower the costs of his electric cars. The goal ? Compete with Tesla, which sells most of its cars online. On the contrary, Ford remains a traditional brand, which still markets its vehicles mainly in concessions. Except it’s expensive.
Jim Farley wants to reduce by 2,000 dollars (about the same amount in euros) the costs of sale and delivery for each electric vehicle, in order to better compete with its Californian competitor. Several avenues were then considered, such as delivery directly to the customer’s home. This would prevent the vehicle from being stored for several weeks or days in the dealership, which costs on average between 600 and 700 dollars per car.
Other measures have been announced, while the boss spoke a few days ago. In particular, he unveiled the brand’s new commercial strategy, based on five pillars, namely training, recharge, fixed prices, customer experience and digital experience.
A radical strategy
And the least we can say is that the dealers are under pressure. Indeed, and as explained InsideEVs, the latter have until October 31 to decide if they wish to continue selling electric vehicles, including the Ford Mustang Mach-E. If they wish to continue, they will then have to comply with the new brand requirements and will have three options for doing so.
Either they will stop selling manufacturers’ electric cars, or they will become Model E Certified or Certified Elite dealers. To be able to obtain one of its two statuses, the points of sale must then be equipped with a fast charging station, made available to customers.
To become Model E Certified Elite, concessionaires will have to invest between 1 and 1.2 million dollars in order to develop their services and infrastructures. A cost displayed at “only” 500,000 dollars for the Model E Certified, period. In any case, part of the expenses will be borne by Ford. Note that this 2nd group will not have the right to sell as many electric cars as the first. Finally, concessions that do not adhere to this strategy will no longer have the right to market electric models for at least three years. A radical choice of the manufacturer’s brand.
Towards lower prices
In addition to reforming its sales system, Ford also wants to offer more affordable models, in order to attract as many customers as possible. This is notably why the American firm is planning to launch a brand new, more affordable electric car, below the 25,000 euro mark. It could then compete head-on with the future Tesla Model 2, but also with the Volkswagen ID.2 scheduled for 2024.
For its part, the future creation of Ford will not arrive before 2026, while the brand is working on the development of less expensive batteries, in partnership with Volkswagen. Other models are also planned, including an electric version of the Puma which could arrive in 2025.
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