During Ford’s Capital Markets Day presentation, company CEO Jim Farley announced the automaker was going to transition to set, non-negotiated prices for its electric vehicles.
“We’re matching these vehicles with a modern and simple customer experience that starts with one major breakthrough, non-negotiable price. Our dealers can be a competitive advantage as we work together to lower distribution costs. We’re going to reduce physical inventories dramatically in Model e, and deploy a new marketing model that focuses on loyalty and customer communication and building a community rather than spending billions on TV advertising and broadcast media,” Farley said.
Doug Field, Ford’s chief advanced product development and technology officer, offered some more details about the new pricing strategy. It will take effect in January 2024 for the automaker’s EVs.
“Model E customers will have flexible purchase options, online, in the store, with transparent pricing that they don’t have to haggle over, and remote vehicle delivery, and later pick up as well. These better experiences make customers more likely to build a relationship and choose the same dealer again,” Field said.
Ford will also establish new retail replenishment centers. These sites will hold a couple of weeks of vehicle inventory and will be able to deliver a model to a customer in less than 10 days.
The company made the non-negotiable pricing a pillar of creating its new Model e dealer network. Showrooms have to post set prices for EVs on the automaker’s website, and customers can complete the purchase online.
However, this does not mean Ford is adopting a direct sales model like what Tesla or Rivian use. Customers are still buying from a dealer but don’t have to enter a showroom if they don’t want to.
In December 2022, Farley said that 1,920 of the automaker’s 2,968 dealers in the United States agreed to become a Model-e-certified location for selling the brand’s EVs. These showrooms have to put employees through electric-vehicle-specific training, install chargers, and offer complimentary vehicle pickup and dropoff.
Motor1.com reached out to InsideEVs Senior Editor Tom Moloughney for his analysis of Ford’s pricing plan:
“Ford’s approach is a clever workaround to dealer franchise laws to offer what many consumers today want; a non-negotiable set price with the option of home delivery. Tesla has proven this formula works and is often preferred over the existing car buying experience that can consist of many hours at the dealership to negotiate a deal before it gets approved by a floor manager, only to get turned over to the finance department where you’re offered everything from undercoating, window etching and wheel insurance, to an extended warranty.
“Model e’s approach will be to allow customers that want to eliminate all that to do so with online pricing that the dealers set individually, while still offering the dealership experience that some buyers prefer.”