Tesla Pushing Ford To Change Dealership Model
CEO Jim Farley notified that dealers will have to decide by Oct. 31 whether they want to be a part of the EV network going forward. If they do, they commit to investing between $500K-$1M into their dealership.
In this video I discuss how we are seeing the impact of Musk and Tesla again. Farley is watching what Tesla is doing and trying to counter. This is something that the other legacy automakers are not doing.
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Summary:
In this video, the speaker discusses how Tesla is disrupting Ford by transitioning to electric vehicles. Ford is requiring dealerships to invest significant amounts of money to adapt to this change, with Jim Farley leading this shift. The speaker highlights that Tesla's direct sales model, over-the-air updates, and fewer moving parts in electric vehicles are influencing the automotive industry. The discussion also touches on Tesla's potential production in China and its impact on the European market. Ford's plans for the future, potential competition with the Cybertruck, and the evolving automotive landscape are key points covered.
Detailed Article:
The video delves into how Tesla is causing a significant disruption within Ford's operations by moving towards electric vehicles (EVs). Ford's decision to demand its dealerships to make substantial investments ranging from $500,000 to $1 million by October 31st marks a pivotal moment in the automotive industry. This move is part of Ford's strategy to align itself with the growing trend towards electric vehicles in the market.
The speaker outlines Ford's CEO, Jim Farley's initiative to separate their internal combustion engine (ICE) division from EVs to adapt to the changing landscape of the automotive industry. This decision stems from a past issue where customers were faced with unexpected price changes upon purchasing electric vehicles, highlighting the need for transformation within traditional dealership models.
With over 3,000 dealerships in the United States, Ford faces a potential reduction to about 1,100, mirroring Tesla's strategy of fewer service centers or showrooms. This shift signifies a fundamental change in the traditional dealership model and a move towards direct sales and service.
The discussion also delves into Tesla's rapid expansion in China, potentially producing an impressive 100,000 vehicles in Shanghai alone. This production capacity could challenge German automakers due to bureaucratic barriers and competition constraints. As Tesla scales its operations in China, it may impact European markets through increased vehicle shipments, potentially disrupting established players like Germany.
The speaker emphasizes Ford's preparation for Tesla's competition by introducing the F-150 Lightning electric pickup truck and the looming impact of Tesla's Cybertruck on the market. This introduction points towards a broader transformation within Ford to navigate the evolving automotive landscape effectively.
In conclusion, the video underscores the significant changes underway in the automotive industry, particularly with Ford's strategic shift towards electric vehicles amidst Tesla's disruptive presence. The impending choices facing dealerships, the impact of Tesla's production in China, and the looming competition in the pickup truck market between Ford and Tesla showcase a dynamic industry landscape ripe for change.