The US government and automakers appear to be on the same page about transforming the country’s automotive culture from one based on the internal combustion engine to one based on battery-powered electric vehicles.
Both sides seem to understand that such a major shift will require tens of billions of dollars of investment before consumers migrate en masse to EVs.
The money will go towards training, internal charging infrastructure, e-commerce upgrades, remote delivery and collection settingsand upgrades to the digital customer experience.
But 90% of the money will go to charging infrastructure.
Is Biden Coming to the Rescue?
This week, President Joe Biden happened to be in Ford’s backyard in Detroit, Michigan.
The president stopped by the North American International Auto Show to tout his Inflation Reduction Act and the impact the $749 billion bill will have on the auto industry.
IRAs give tax credits for new EV purchases as well as first-time used EV purchases.
Meanwhile, Bipartisan infrastructure bill which was passed last November, invested $7.5 billion in building electric vehicle charging stations “across America.” At the event, Biden announced that the first $900 million will be approved to build 500,000 charging stations across the country
Billions of federal dollars are pouring into the EV space, and since EV charging stations are the biggest expense for dealers looking to get certified, that money could be good for dealers who want to stick with Ford.
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But individual car dealers are not eligible to apply for funding as direct recipients, according to the bill. Funding is distributed among the states, and one of the legal requirements associated with the funding is that charging stations be publicly accessible.
Biden mentioned auto workers repeatedly to a pro-union crowd in the Motor City this week. But he didn’t mention the car dealers that will be needed to achieve the company’s vision for the EV future.
Ford dealers will have until October 31 to decide what they want to do and have until the end of the year to start making investments.
Farley also said he wants dealers to cut sales and distribution costs by $2,000 per vehicle to compete with the direct-to-consumer model that Tesla has used successfully.
So dealers have until the end of the year to figure out if they want to work with Ford going forward.
If a dealer decides that electric vehicles won’t sell as much in their area for the next few years, they can miss the first window, but there will be a second window for Model e certification starting in 2027.
Dealers who want to participate in this certification program will have to commit until 2025. Ford is betting big on electric vehicles as the company seeks to take Tesla’s lead in the market.
The company plans to invest $11.4 billion to build ttwo new electric vehicle production facilities in Stanton, Tennessee, and Glendale, Kentucky, and another $525 million to train skilled technicians to service the new models.
Ford plans to get half of its sales from electric vehicles by 2030 and says it will have the capacity to produce more than 2 million electric vehicles a year by 2026. That would account for about a third of the company’s global production .