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Tesla Competitor, Ford to cancel EV dealerships · Elon Musk Podcast

0:01
Hey everybody, welcome back to the Elon Musk.
0:04
Podcast. This is a show.
0:06
Where we? Discuss the critical crossroads,
0:08
the shape SpaceX. Tesla X, The Boring Company and
0:12
Neuralink. I'm your host, Will Walden.
0:16
Tesla's major competitor, Ford Motor Company is urging its
0:19
dealers to halt their investments in the EV
0:22
certification program amid upcoming changes to the program.
0:27
Now this request comes as the company plans to introduce
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updates to its EV strategy. Responding to the evolving
0:32
market dynamics that are going on right now.
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Now the CEO of Ford, Jim Farley, announced in December of 2022
0:39
that 1920 dealers would join Ford's EV sales program.
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However, since then, several dealers have opted out, leading
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Ford to revise its EV strategy. Marty Gunsberg, a Ford
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spokesperson, confirmed that as of December, dealer enrollment
0:57
for 2023 has dropped to just about 50% for about 2/3 a year
1:03
prior. This decline is attributed to
1:06
changes in the market, prompting Ford to ease some program
1:10
requirements. Now.
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Last year, Ford reduced the number of required Level 2
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chargers and extended the installation timeline.
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Andrew Frick, who's the president of Ford Blue,
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indicated that further changes are forthcoming.
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Frick said there's a lot that we'll be reviewing now.
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Ford plans to meet with his dealer council next month to
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finalize updates, taking into account feedback from nationwide
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meetings with dealers. Now Ford has asked dealers to
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pause their investments in the EV certification program until
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mid June. The company aims to provide more
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informed guidance based on the forthcoming council discussions,
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Frick said. We don't want them to make any
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decisions between now and the middle of June, emphasizing the
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need for dealers to wait for more detailed information before
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proceeding with their investments.
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Now, one significant concern among dealers is the shifting EV
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market. Ford has allayed some of its EV
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plans and is focusing on smaller, more profitable EV
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models, aiming to better align its dealer network with these
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new objectives. And while Frick did not disclose
2:24
specifics, he noted that both the dealer console and
2:27
executives are reliant on the process.
2:29
Based on feedback from the dealer meetings recently, Ford
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has sought cost cutting ideas from suppliers to make its E VS
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more affordable. The Model E unit posted a $1.3
2:42
billion loss in quarter one and a $4.7 billion loss last year.
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A Ford anticipates a $5.5 billion loss in its EV business
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this year. Fairly emphasized that Model E
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must stand on its own. Ford projects that its next
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generation E VS will become profitable within a year of
3:05
their launch. Meanwhile, the company is
3:08
introducing more hybrids to bridge the gap.
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Now the request for dealers to pause EV investments follows A
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comprehensive review of feedback for over 1000 dealers across 11
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meetings during a recent dealer engagement tour, they said.
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We're now in the process of reviewing all that collaborative
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engagement and turning it into intermediate, midterm and long
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term changes where it makes sense for our customers, our
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dealers and Ford. Specific details will be shared
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in the coming weeks. Changes to the EV certification
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program last November reduced the requirement for L2 chargers
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from 5:00 to 2:00 for certified status and from 5:00 to 3:00 for
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certified Elite status. The need for a Level 3 fast
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charger by 2026 was also removed.
4:03
Now Ford's Model E-business unit has faced financial challenges
4:07
leading to a delay in $12 billion worth of EV related
4:11
spending due to slower than expected EV sales growth
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impacted by affordable issues and insufficient charging
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structure. Now as of December 2020, two 2/3
4:23
of dealers had signed up for the EV charging program.
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Currently, about half of Ford's dealer network is enrolled.
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The program has faced legal challenges with varying results.
4:35
Now, Ford's dealer console meeting next month will address
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the feedback received from the recent dealer tour aiming to
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refine the EV certification program and possibly other
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business areas, they said. Our plans are really aimed at
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simplifying and reducing complexity.
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The company will review everything from floor plan
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assistance to Model E standards and Ford credit policies.
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And the EV certification program has been controversial due to
5:03
significant investments required for dealers.
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Despite multiple revisions, Ford has seen a substantial drop in
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dealer participation. Ford continues to develop future
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EV models and aims for increased affordability, including a
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rumored next generation electric pickup.
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Now the company remains committed to adopting its
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strategy to changing market conditions.
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What was great is that we. Had candid.
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Conversations around every aspect of the business, nothing
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was off limits, said Frick. Its collaborative nature of the
5:38
recent dealer meetings. Hey, thank.
5:46
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