“Good artists borrow, great artists steal” - Pablo Picasso. In 1896, Ford made his first car and his most lucrative theft. While the manufacturing of the quadricycle was a major feat, it came 11 years after two Germans -- Gottlieb Daimler and Karl Benz -- developed the first gasoline-powered automobile. The next century or so would be kind to Ford, as they’ve remained in business, thrived, and as of 2021 had $257 billion in assets. There is reason to believe though, that Ford’s most recent plan to steal from a competitor, could be just as bankable.
When Pablo Picasso said those lines, I'm sure he never imagined that they’d be used to discuss electric vehicles. However, they can apply directly to what Ford F did to Daimler and Benz and is currently doing to mimic Tesla’s TSLA success.
Tesla, if you haven’t noticed, does not have any dealerships. Instead, Tesla has bucked 60 years of car selling history and has consumers purchase from them directly. This new method of selling cars without the need of a dealer is supported by a few states as they consider the process beneficial to consumers because it removes the dealership markup and encourages better business practices. Consumers appreciate the removal of tricky negotiations with dealers, and Tesla themselves never run into the hassle of trying to unload unpurchased vehicles before the next year’s model hits the market. While you may not be able to impulse buy a Tesla, in theory anyway, they capitalize on the fact that there is no excess inventory - no wasted money.
A few other reasons why it makes sense for Tesla to avoid dealership franchises have less to do with the brand and more to do with the product itself. Dealerships tend to make a good chunk of their money off of services. Dealerships make money off of oil changes, transmission services, etc. Considering the fact that electric vehicles don’t have transmissions or a need for oil changes, there is little opportunity for the dealer to make money.
Ford has observed this. They’ve taken note of how custom online orders reduce inventory backlog, and the minimal service that electric vehicles bring to a dealership, and they’ve altered course as well. In order to buy a Ford Electric Vehicle, you’ll have to order them directly.
So, if you’ve historically bought Ford vehicles and are used to waiting until the end of the year to buy the cheaper inventory, you’ll have to try something new and order ahead of time. If you do happen to see a new Ford Electric Vehicle at a dealership, expect to overspend, as it will be a rare occasion to get one instantly.
While Ford doesn’t appear to be shutting down their dealership franchises totally, it’s not hard to forecast a scenario where all dealerships will be used cars only. If the electric vehicles that Ford produces continue to sell at a rapid rate, its only a matter of time until other brands follow suit.
This is yet another example of Elon Musk serving as a disruptor of the status quo. Manufactured scarcity and efficient production are likely to serve as a profitable combination for Ford, just as it has been for Tesla. How long will it take for others to follow suit? Is this the death of dealerships? Only time will tell, but it may be a good idea to invest in the auto industry’s oldest thief.
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