Published - September 15, 2022 @ 2:52 PM (EET)

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On Wednesday, Ford Motor Co. (NYSE:F) released strict new rules for US dealers to sell its electric vehicles, including requiring fixed prices and upfront investment in chargers as the automaker attempts to cut overhead costs and boost profits.

The Dearborn Michigan company is giving its nearly 3,000 car dealers the option to become "EV-certified" with investments of $500,000 or $1.2 million, including installing new infrastructure for charging EVs at dealerships.

As part of the new retailing strategy, dealers who opt into selling EVs will need to abide by certain standards, and also restricts some dealers from carrying vehicle inventory on the ground and mandate non-negotiable pricing on Ford's website.

After briefing dealers about the plans, CEO Jim Farley told reporters,

"We're betting on the dealers.  We're not going to go direct.  But we need to specialize."

To continue narrowing the gap between rival Tesla, dealers will have until the end of October to make a decision and until the end of the year to make the investments.

WHY IT MATTERS

Farley is investing $50 billion to build 2 million EVs annually by 2026, with Ford's current lineup of all-electric vehicles, including the Ford F-150 Lightning pickup truck, Mustang Mach-E crossover, and e-Transit van.

Introducing these EV-specific selling programs reflect how manufacturers more broadly are trying to compete with Tesla's direct-to-consumer model.

"Changes in the market have compelled Ford and our dealers to revisit how customers shop, buy and own, and how they will do this going forward." - Ford CEO, Jim Farley

In addition, Farley has been particularly outspoken over the need to modernize the auto retailing model, warning dealers that the standards to which customers will hold them could be "brutal."

Still, the CEO has, in meetings with dealers and conferences, emphasized that dealers are an essential part of the company's network.