Ford Closes Regional EV Hubs

Suits at the Blue Oval have binned a scheme which saw yet-to-be-delivered EVs stored at so-called “rapid replenishment centers” instead of dealer lots.

According to a report from  Automotive News, one of the reasons this idea had been implemented was to help reduce dealer expenses since stores wouldn’t need to floorplan EV inventory which had yet to sell. At the risk of massive oversimplification, floorplan refers to money a dealer is borrowing for purposes of financing its inventory. Ford started with the F-150 Lightning as the sole model being part of this system, with designs to add the Mach-E et al later on. But it seems there was no shortage of dealer hesitation, leading Ford to halt the effort and return the Lightning to a typical distribution model.

If this seems odd to you, well, join the club. One would think a dealer would be tripping all over itself to sign up for this system since it allowed Ford to assume a majority of financial risk. Instead of having millions tied up in EVs sitting on the lot, a dealer could free up that bandwidth for other uses – whether that would be for other hot-selling inventory for which they could get allocation, building upgrades, or buying another fur coat for their third girlfriend.

However, dealers will be dealers. If there’s a bunch of people more addicted to instant gratification (possibly in addition to several recreational substances), I’ve yet to meet them. The two-week waiting time to get an EV out of the “rapid replenishment center” was likely a major sticking point, since we all know dealers like being able to see taillights go over the curb as soon as humanly possible after getting a fresh up. 

And while it went unmentioned in the AN story, dealers would also have shunned the idea if the amount of total dealer holdback (money paid to dealers by a manufacturer to help grease that aforementioned floorplan) per vehicle was reduced by participating in this system. Some dealers leverage holdback as part of negotiations.

The cycle of focusing on (very) short-term gain continues.

[Image: Ford]

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