Ford Wants Dealers To Help Slash Costs To Become More Competitive With Tesla

We’re living in the era of the stealership, but that won’t stop Ford CEO Jim Farley from asking dealers to help cut costs.

While this could prove to be an uphill battle, Reuters is reporting that Ford wants to “cut $2,000 (£1,725 / €1,990) a vehicle out of selling and distribution costs to be competitive with Tesla” and other EV startups that aren’t reliant on franchised dealers.

Details are slated to be announced at a dealer convention next week, but the company is reportedly looking at a “low inventory model.” Under the proposal, dealers wouldn’t have a large inventory of vehicles sitting on their lots as the automaker would instead push customers to order a vehicle and then take delivery from the dealer when it’s ready. The publication says Farley has previously estimated this could save the company around $600 – $700 (£517- £603 / €597 – €697) per vehicle.

Also Read: Study Finds 25% Of Car Buyers Won’t Return To Dealership That Charged Above MSRP

While Americans have gotten used to buying off the lot, shortages have made ordering more common and it’s not unusual for automakers to begin accepting pre-orders shortly after introducing a new vehicle. This could make the switch relatively seamless for many consumers, although some may not like the practice.

Besides being asked to help cut costs, dealers are expected to be told to make significant investments to prepare for an onslaught of electric vehicles. This is a key issue as dealers told the publication it can cost them up to $500,000 (£431,332 / €497,722) to install chargers.