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Ford, GM Are All-In On EVs. Here’s How Their Dealers Feel About It

Wolf Man

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For easier reading with photos and without my rudimentary editing, follow the link:

https://www.cnbc.com/2021/06/13/gm-ford-are-all-in-on-evs-heres-how-dealers-feel-about-it-.html

GM, Ford are all-in on EVs. Here’s how their dealers feel about it
PUBLISHED SUN, JUN 13 20219:00 AM EDT UPDATED MON, JUN 14 202111:36 AM EDT

Bob Woods
CNBC

KEY POINTS
General Motors is aiming to produce only EVs by 2035, with 30 new plug-in models arriving by 2025, a $27 billion investment.

Ford, which is investing $22 billion in EVs and announced that 40% of its vehicles will be electrified by 2030, generated excitement with the recent debut of the F-150 Lightning all-electric pickup.

Many auto dealerships are embracing the electric vehicle transition, but there are concerns about costs to be paid, staff training and impact on lucrative service department business.


After years of come-and-gone predictions that battery-powered sedans, pickups and SUVs would replace gas-guzzling, emissions-spewing models, the shift to electric vehicles is revving up. Beyond EV pioneer and market leader Tesla, virtually every major auto manufacturer is lining up to flip the e-switch and it is not just a big deal for consumers, but the thousands of auto dealerships across the country that will need to embrace the electric future.

General Motors has said it’s aiming to produce only EVs by 2035, with 30 new plug-in models arriving by 2025, marking a $27-billion investment. Ford, which previously committed $22 billion to EV development, just announced that 40% of its vehicles will be electrified by 2030. Toyota, Volkswagen, Daimler, Hyundai, Fiat Chrysler, Honda and other automakers are making similar pledges.

In preparation for this onslaught of new models, franchise car dealers in the U.S. — many of them longtime small businesses located in suburban and rural communities — are gearing up. Salespeople are getting ready to put you in an EV today. And because EVs have fewer moving parts, service technicians are being trained to maintain them.

“EVs are the big issue right now,” said Mark Paladino, general manager of Colonial Ford in Danbury, Connecticut, and a 40-year veteran in the business. He was still excited about Ford’s debut of the F-150 Lightning pickup, an all-electric version of the best-selling vehicle line in the nation for four decades running.

Ford F-150 Lightning ‘beyond expectations’

Paladino’s excitement is warranted, considering that Ford.com tallied 70,000 reservations for the Lightning within the first week of its official release on May 19, with $100 deposits plunked down for each, said Jason Mase, Ford’s cross vehicle marketing manager. That followed the successful introduction of Ford’s Mustang Mach-E electric vehicle, where 70% of initial customers were new to Ford. For the F-150 Lightning, Mase said, “90% ordered the highest trim level and 80% ordered the extended-range battery. ... It was beyond our expectations.”

Colonial is one of 2,300 Ford dealers, among a total of roughly 3,000, that have volunteered to become EV-certified, an investment that entails training sales and service personnel, upgrading battery-charging stations and purchasing special equipment, parts and tools. The remaining third have thus far opted out of spending nearly $50,000 for the certification. Other manufacturers are asking for upwards of $300,000 for the designation.

“We were all in right away,” Paladino said, adding that the family-owned dealership was previously trained on several gas-electric hybrid models, as well as Ford’s first-ever EV, the 2021 Mustang Mach-E SUV, introduced in December. “We see EVs as a part of our business that will only get larger, and we want to be in that world.”

EVs comprise less than 3% of overall new-car sales in the U.S. Tesla has dominated the market, making up about about 55% of it, according to Credit Suisse — though that’s down from 72% a few months ago, reflecting the growth in competition.

Although EVs now represent only a fraction of the U.S. automotive fleet, they “are eventually going to become a significant part of a car retailer’s business,” said Chris Sutton, vice president of automotive retail for market research firm J.D. Power.


A Bloomberg New Energy Finance report estimated that by 2040, EVs will account for 58% of worldwide passenger vehicle sales, with China, Europe and the U.S., respectively, leading the pack.

“By providing their sales and service expertise, and as an education resource for customers, they add value to automakers,” Sutton said of dealerships. Though he added that because EV sales to date have been concentrated in coastal states, Michigan and Texas, many dealers elsewhere remain in wait-and-see mode.

Two-thirds of car consumers interested in EVs

In addition to manufacturers’ ambitious targets, the Biden administration has proposed spending nearly $42 billion to build out the nation’s EV battery-charging infrastructure, gas prices have inched up and ExxonMobil’s shareholders elected three climate-friendly directors supported by an activist investing group to its board. Support for Biden’s infrastructure spending plan, however, to which EV infrastructure spending is tied, remains uncertain.



Car dealers are focused on the here and now. They should be heartened, then, by a Cars.com survey that reveals two-thirds of Americans are interested in buying an EV, despite barriers such as higher sticker prices than internal combustion engine (ICE) models and the paucity of charging stations. Plus, some EVs still qualify for a $7,500 federal tax credit, while states such as California, New Jersey and New York offer additional rebates up to $5,000.

These data help explain why the 17,000 members of the National Automobile Dealers Association (NADA) “can’t wait for EV products to get here,” said NADA President and CEO Mike Stanton. “Dealers are in the business of selling cars and making customers happy, so why wouldn’t they want to sell EVs?” he said, dismissing reports of lackluster enthusiasm among dealers.

Political support for climate change policies vary across the nation, and in the past year support has been dropping among Republicans for the federal government making action on clean energy a top priority, according to a recent survey conducted by the Yale Program on Climate Change Communication and George Mason Center for Climate Change Communication. But considerable support remains among conservatives for providing tax rebates to people who purchase energy-efficient vehicles or solar panels: 78% of moderate Republicans and 60% of conservative Republicans. It was the only “climate-friendly energy policy” in the survey which a majority of both moderate Republican and conservative Republican registered voters support.

One genuine concern for dealers, however, is the fact that EVs don’t require oil changes, transmission repairs and other service owners of ICE vehicles routinely bear — and that account for 50% of dealers’ gross profits. A 2019 report from AlixPartners estimates that dealers could see $1,300 less revenue in service and parts over the life of each EV they sell.

Even though 70% of aftermarket service of ICE vehicles is handled by independent shops, franchise dealers don’t want to cede EVs to them, especially as consumers familiarize themselves with battery charging and other peculiarities. “The EV owner might trust the dealers more to perform service than the aftermarket shops earlier in their ownership period,” Sutton said.

The service element doesn’t necessarily worry Rita Case, CEO of Rick Case Automotive Group in Ft. Lauderdale, which represents VW, Hyundai, Honda, Audi, Mazda and other brands at its dealerships in south Florida and Atlanta. “EVs need tires, brakes, batteries, lights and some steering and drivetrain maintenance,” she stated. Rick Case Auto is already selling and servicing a limited number of EVs and hybrids, but “within the last six months we’ve ramped up EV training for our salespeople and technicians and purchased new charging equipment” in anticipation of increased consumer demand for new electric models, Case said.

GM has been readying its 4,100 franchise dealers over the past year, not only for the refreshed Chevrolet Bolt — an early EV entrant that has gone through a recent design — but also the upcoming electric GMC Hummer and the Cadillac Lyriq. “Service is critical to what our dealers do today and will be in the future,” said Travis Hester, GM’s chief electric vehicle officer. “EV service will definitely evolve and won’t be exactly the same” compared to that for ICE vehicles, he said, noting that some EV parts may last 10 to 15 years. “No one is panicking about it, but we know it’s going to change over time, so we’re working with our dealers on that.”

Meanwhile, Paladino can’t keep up with Colonial Ford’s conventional service demands. “We’re booking and servicing every vehicle we can,” he said. “Right now, I’m three weeks out in servicing your car.”

Online auto sales threat

Another issue on dealers’ minds is direct-to-consumer (D2C) sales, the business model that’s fueled Tesla’s marketing of more than 385,000 EVs on U.S. roads to date. Tesla does operate about 130 company-owned showrooms, yet sales are transacted online. At last count, 33 states allowed D2C auto sales, with others’ legislatures debating bills that would bypass the so-called franchise system that has legally connected dealers and manufacturers for more than a century. NADA, states’ dealer groups and traditional automakers have advocated maintaining the franchise system, claiming that it levels the playing field.

Then again, online marketing is nothing new to car manufacturers and dealers. Every brand maintains a website where shoppers can peruse models and pricing, and even custom design a new car. But they’re ultimately referred to a local dealer, who completes the transaction and aims to establish a loyal relationship that includes routine maintenance, service and perhaps a future sale.


Generating foot traffic — the proverbial “kicking the tires” routine — is the lifeblood of dealers’ business models, so to survive they will have to adjust to consumers’ appetite for buying directly online, a routine that only expanded during the pandemic. That means letting manufacturers take reservations and deposits online, as Ford and other manufacturers are doing, and finding ways to attract and foster long-term relationships with a new generation of EV drivers, such as special test-drive events, on-site charging and mobile service techs who make house calls. “The dealer network has been around for a long time because they are able to pivot to where the market is and what customers expect and require,” Sutton said.


The auto industry is at an inflection point in the transition to EVs, and dealers large and small will have to pivot once again. “If you’re going to play in the EV sector, you’ve got embrace it now — the charging infrastructure, the parts, the equipment, the labor,” Paladino said.

While Case is waiting for greater demand for EVs, she’s “super positive” about the future. “I’m in the business of selling cars, and one thing I know for sure is people are going to want cars.”
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ShawnWillis

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What an insightful article. Thanks for the write-up. I'll bookmark this for later.
 

Sundancer330

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Well GM won't be selling to many of the butt ugly Hummer EV for $125k, I see them running around town they look like the old Avalanche.
 

beatle

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It's true, there are plenty of things to break on an EV. They are still very much cars that require replacement parts just like their ICE counterparts. You could argue (successfully) that EVs require more brake maintenance as the pads can seize in the calipers if not properly lubricated on a regular basis. This is a popular issue on Teslas, and one I tackled right after buying my 5 year old car.

I don't think Toyota, Subaru, or Mazda dealers are concerned that their cars are reliable and need little service.

As for online sales, maybe people are just responding to a dealer model that lends itself to nagging, upselling, and squeezing the buyer for silly fees during the buying process. I realize all dealers are different and not all are sporting plaid suits and creepy mustaches, but most people have a story where it took them 4 hours to buy a car even after they'd made their decision and opened their checkbook. In contrast, I think it took all of 30 or 45 minutes to pick up my Tesla.
 

F150ROD

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Agreed. Not only does it take a couple of hours at the traditional dealership but your sales person wants to sell you more items, the sales manager wants to sell you more and then you get into finance where they want to sell you more. To top this all off you have to fill out credit applications even after you have already told them you have finance ready to go.

With Tesla it was a quick sign here and here, vehicle inspection, get your keys and go. No one was there trying to sell you more than you had already asked for.
 

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Texas Dan

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All you have to do is look at the maintenance schedule to see there is a lot of maintenance on on EV. The problem with dealerships is that they don't even know how to do scheduled maintenance on gas vehicles, much less an EVs. When you take your car in to the dealer for say a 30,000 mile maintenance the dealer will add things that are not on the maintenance schedule and completely miss items that are.

I have confronted dealerships about this issue and I usually get the excuse that the dealerships know what's best for your car. The dealerships know better than the people that designed and built the car? I think not.

The only way you can actually get a scheduled maintenance performed at a dealership is to get a line item service list based on the maintenance schedule. I have gotten so frustrated by dealership maintenance on my EVs that I usually perform the scheduled maintenance myself. And I think it's important to know how to do the maintenance even if you let the dealership perform it.

Case in point: The maintenance schedule on my 2019 Kia Niro EV requires periodic inspection of the gear reduction oil. I asked a dealer to prepare a service item list for the schedule maintenance and there was nothing on there about inspecting the gear reduction oil. When I asked the service writer how they would inspect the gear reduction oil I was told they would need to send the oil off to a lab.

I decided to perform the maintenance myself but I could not find any information on-line on how to inspect the gear reduction oil. I was so obsessed with the inspect gear reduction oil item in the owners manual that I purchased a complete service manual. The service manual said that all I had to do to inspect the gear reduction oil was to take a plug out of the side of the reduction gear box and see if I could touch the oil with my finger, just like you would do with a differential.

A simple enough task to perform but in all actuality it took a considerable amount of time. First I had to put the car on jack stands, then I had to remove 7 bolts and about 10 body clips so I could remove the lower cover and then I could remove the gear reduction plug and check the fluid level. After all that I had to put everything back together, torque all the bolts and take the car off the jack stands.

Doing something like checking the gear reduction oil is definitely something I would prefer the dealership did if I paid for a scheduled maintenance. I can definitely see how an EV owner could get sticker shock when a service department gives an estimate for doing something like inspecting the gear reduction oil. If I had not bought the service manual I would have never known just how easy nor how time consuming inspecting the gear reduction oil is.

So, if the dealership does the maintenance right there is money to be made in servicing EVs. But the dealerships have to be committed to the maintenance schedules and they need to actually know how to perform the maintenance. Maybe if you develop a relationship with the service technicians over time so both the technician and the owner knows what needs to be done you can get the scheduled maintenance done right, otherwise buyer beware.
 

beatle

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So, if the dealership does the maintenance right there is money to be made in servicing EVs. But the dealerships have to be committed to the maintenance schedules and they need to actually know how to perform the maintenance. Maybe if you develop a relationship with the service technicians over time so both the technician and the owner knows what needs to be done you can get the scheduled maintenance done right, otherwise buyer beware.
You can actually take "EVs" out of your first sentence and still have everything correct. If any business is not adept at performing a task for any vehicle, I'll find another business (or just do it myself). This would go for dealerships or 3rd party shops, though with a dealership you'd think you're getting a known quantity (quality).

If a dealership bemoans the advent of EVs, they probably bemoan the advancement of any other aspect of car technology that requires them to learn something new. That all said, I'm sure there are some dealerships that are committed to making a name for themselves as being go-to locations for EV service. It's a whole new game all over again.
 

Snappy22

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Quote: “For the F-150 Lightning, Mase said, “90% ordered the highest trim level and 80% ordered the extended-range battery. ... It was beyond our expectation.”

What is this guy referring to? My reservation does not have a specific trim associated with it, and certainly doesn’t have achieved “ordered” already!
 

Texas Dan

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Quote: “For the F-150 Lightning, Mase said, “90% ordered the highest trim level and 80% ordered the extended-range battery. ... It was beyond our expectation.”

What is this guy referring to? My reservation does not have a specific trim associated with it, and certainly doesn’t have achieved “ordered” already!
I thought the same thing but then I thought maybe he is talking about pre-production orders. I bought a 2017 Focus Electric that had a build date of September, 2016 when the actual production of the 2017 model actually in March, 2017. Pre-production units of the F150 Lightning will probably start rolling off the assembly line this September and that may be the orders he is talking about.
 

biers

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Quote: “For the F-150 Lightning, Mase said, “90% ordered the highest trim level and 80% ordered the extended-range battery. ... It was beyond our expectation.”

What is this guy referring to? My reservation does not have a specific trim associated with it, and certainly doesn’t have achieved “ordered” already!
I wonder if he was referring to Mach E reservations?
 

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Lightning.Dav

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Quote: “For the F-150 Lightning, Mase said, “90% ordered the highest trim level and 80% ordered the extended-range battery. ... It was beyond our expectation.”

What is this guy referring to? My reservation does not have a specific trim associated with it, and certainly doesn’t have achieved “ordered” already!
I'm guessing they did a random phone survey of reservation holders. Maybe 10 people? :p
 

biers

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I'm guessing they did a random phone survey of reservation holders. Maybe 10 people? :p
Could be. I’m sure they are still doing some market research on pricing. Would love to know full details like the have put out for the Maverick. Very hopefully they pull the $3k lower price deal like they did with the Mach E. That price jump from Pro to XLT is “too damn high”!
 

don.mullins

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I think GM’s stated intention of 100% EVs by 2035 is just hype. I think Ford’s more moderate statement of 40% “electrified” is achievable - Ford considers the Powerboost an Electrified vehicle. The also referred to the Maverick as electrified.

That is a reasonable goal that acknowledges that while a significant number of the customer base can go EV, Plug-in Hybrid or Full Hybrid, many cannot.

Building out a product line that covers all the bases is the best play. The F150 will be the benchmark of the in 2022, with the Lightning, the Powerboost, the Powerstroke, and the Ecoboost.

Today the Lighting has a different interior that to me is more about marketing in the EV world. It has to complete with a Tesla on that level for now. It has to look like an EV.

The ideal to me would be to share as much across the platform as possible. I think the Lighting shares a cab and bed today. I would think the interiors could become more common. Why couldn’t a Powerboost have that big screen? Or a Powerstroke? Or Ecoboost? Let the frame + drivetrain be where the differences are.
 

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That big Tesla like screen is the biggest thing that may keep me out of the Lightning. They nailed it on the '21 F-150 by giving it a large screen but mounting it in landscape so you have physical HVAC and radio controls. I want nothing more in terms of screen sizes than what I have in this '21 Lariat. We test drove a Mach E, and that huge vertical screen has a cool look about it, but functionally it's a PITA compared to my F-150. I can adjust my heated/cooled seats, turn on my heated steering wheel, change temps, everything without looking away from the road. But on that Mach E, even if you get good at hitting the rough location, there is way more chance of being off slightly and cranking up the wrong setting.

While I can live with it overall, my wife flat out said there is no way. So Ford lost a Mach E sale by chasing Tesla and choosing form over function. While I don't think it's a world ending thing, I totally get why she doesn't want it. I love big screens and high tech stuff, but we also passed on the Model Y for the same reason, sometimes moving things to a screen isn't an improvement just because it cuts down on assembly costs.
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