Ford CEO says EVs will be sold 100% online with nonnegotiable price • Hacker News Board

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#311

Post by kelp » Fri, Jun 03, 2022, 3:12 AM UTC

I bought my Volvo C40 EV this way, though it wasn't exactly seamless and the overall price I ended up paying wasn't as clear as it could have been, though it was all discounts in the end.

I put in the order through Volvo online, and they confirmed the build sometime the middle of last year.

Volvo had an online order tracker, that shows progress from order acceptance to the car being in production, etc. But it was never actually updated. I was a little worried the car wasn't going to show up before my existing lease was up in June. So I contacted Volvo customer support in early March and they surprised me by telling me the car was going to be delivered to the dealer the next week. I had heard nothing from anyone in months, so that was a big surprise.

I called the dealer, who I'd never talked to until that point, and they confirmed the car was coming in the next week and setup an appointment to pick it up. Because used car prices are crazy they could also buy out my leased ICE Volvo and give me a bit of money back for it.

So the price I paid (another lease) ended up including the new C40 at MSRP, minus trade-in, minus CA EV credit, minus Federal EV credit, and minus a Volvo loyalty discount.

It wall worked out pretty well, but would have been nice if their order status page actually showed order status. I imagine it was a manual process to update it and somehow that wasn't getting done. I heard from other they had the same experience.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#312

Post by grogenaut » Fri, Jun 03, 2022, 3:14 AM UTC

__d wrote: post #303

grogenaut wrote: post #268

Earlier quoted context omitted.

Right now sure... pay who you have to if you need the part. But supply issues will get solved, this is a temp situation. I'm solving the interim by having 4 vehicles + mass transit + wfh.

> I'm solving the interim by having 4 vehicles + mass transit + wfh. Is that, maybe, a little bit ... overkill? Quadruple redundancy, plus a failover, plus reduced demand. Phew!

my car, my kids car, my wife's car, my motorcycle + bought near a bus route to work + pandemic. Son's car will go away sometime but it's around if I need a replacement car.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#313

Post by bin_bash » Fri, Jun 03, 2022, 3:15 AM UTC

bredren wrote: post #295

bin_bash wrote: post #267

Earlier quoted context omitted.

I wonder if maybe they're preparing to fully spin off the EV models into its own corporation for this exact reason: https://chargedevs.com/newswire/ford-to-spin-off-its-evs-int...

Does the law apply to a business unit? I’d expect it to require a new company.

It would. I'm saying they might have split the company into separate units in order to make it easier to spin off a new corporation.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#314

Post by heavyset_go » Fri, Jun 03, 2022, 3:15 AM UTC

toomuchtodo wrote: post #190

jvm wrote: post #157

Earlier quoted context omitted.

Selling online without negotiated price is a big change. That should make the dealerships really uncomfortable in the long run… he's kind of saying "oh the dealerships could rent out Mustangs" but is that actually realistic?

Diplomacy is the art of saying “good dog” until you make it to the rock. Ford is learning what Tesla knew from the start: dealership interests aren’t aligned with EV manufacturers. There’s very little service revenue, and dealers are incentivized to add “market adjustments” to vehicles (which Ford dealers have been doing) creating a poor customer experience. Ford has existing dealerships and is going to have a heck o…

Unfortunately, manufacturers' interests are often not aligned with retail customers' interests.

For example, with Tesla, the company optimizes delivery numbers of cars sold by sacrificing quality control, and their service center model is anemic and almost an afterthought, especially when it comes to addressing the QC issues their customers experience.

For every Tesla with 400k miles on them with a few thousand dollars in maintenance costs, there are a dozen cars that are delivered to customers like this one[1] from today on r/TeslaLounge, with 17 blatant issues upon delivery that QC should have caught early on in the process. There are stories on that subreddit about customers having to wait months, without a loaner car, for service centers to fix their cars or to even get service centers on the phone about the status of their repairs and cars.

Dealerships act as an intermediary customer that can perform QC, repairs, customization, service, maintenance, reject deliveries etc that manufacturers choose to skimp out on.

[1] https://old.reddit.com/r/TeslaLounge/comments/v3jkn3/update_...

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#315

Post by robotresearcher » Fri, Jun 03, 2022, 3:18 AM UTC

buzzdenver wrote: post #218

Alupis wrote: post #168

Earlier quoted context omitted.

I don't follow this logic. The article says Ford is going 100% online for these cars, meaning there will be no other reference price available. Ford can charge whatever they want, so long as some people are willing to pay it - and during COVID we've seen people more than willing to way overpay on cars. There is no competition with Ford's direct sales website. None. At least dealerships attempt to compete on price.

There is competition between car companies.

Also competition with keeping your existing car. People won't pay just anything.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#316

Post by robotresearcher » Fri, Jun 03, 2022, 3:19 AM UTC

Alupis wrote: post #168

buzzdenver wrote: post #153

Earlier quoted context omitted.

If you believe in competition then the logical consequence will be that the no haggle MSRP will be much more competitive than the current (well pre-COVID supply chain horror) MSRP with 5% padding built in because everyone likes to haggle and think that they are getting a good deal.

I don't follow this logic. The article says Ford is going 100% online for these cars, meaning there will be no other reference price available. Ford can charge whatever they want, so long as some people are willing to pay it - and during COVID we've seen people more than willing to way overpay on cars. There is no competition with Ford's direct sales website. None. At least dealerships attempt to compete on price.

> There is no competition with Ford's direct sales website. None.

Do I have to buy an F150 Lightning? I do not.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#317

Post by thaeli » Fri, Jun 03, 2022, 3:20 AM UTC

toomuchtodo wrote: post #190

jvm wrote: post #157

Earlier quoted context omitted.

Selling online without negotiated price is a big change. That should make the dealerships really uncomfortable in the long run… he's kind of saying "oh the dealerships could rent out Mustangs" but is that actually realistic?

Diplomacy is the art of saying “good dog” until you make it to the rock. Ford is learning what Tesla knew from the start: dealership interests aren’t aligned with EV manufacturers. There’s very little service revenue, and dealers are incentivized to add “market adjustments” to vehicles (which Ford dealers have been doing) creating a poor customer experience. Ford has existing dealerships and is going to have a heck o…

Is there really that much service revenue for modern ICE cars that isn't stuff BEV cars need too? Modern powertrains are pretty bulletproof, 10k oil changes and 30k air filters will get you to 100k miles. "Tune ups" aren't really a thing anymore either, especially in the first 100k.

Brakes? Maybe you're cutting out one or two pad slaps in that 100k.

Oil changes? Yeah, you've eliminated those, the lowest margin service dealers do.

Suspension components, air conditioning, etc? No difference, and that stuff shouldn't need to be touched in the first 100k anyway.

Tires? BEVs eat tires.

Still need wiper blades, cabin filters, etc. But those aren't big items either way.

I guess I just don't see where all this recurring service revenue comes from. Cars just don't break until they're 10-15 years old. Maybe some cars are really that unreliable still?

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#318

Post by jaredhansen » Fri, Jun 03, 2022, 3:21 AM UTC

jvm wrote: post #157

medler wrote: post #82

This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it IMO. He wasn’t saying dealerships are going away; he was actually saying the opposite. The point he was making was that Ford is going to adopt some of Tesla’s practices while using the dealership network to compete with them. Here’s the quote with more context: “I believe for retail, we have to -- it's kind of like what happene…

Selling online without negotiated price is a big change. That should make the dealerships really uncomfortable in the long run… he's kind of saying "oh the dealerships could rent out Mustangs" but is that actually realistic?

This might be right, but I'm not so sure. Public perception is that dealerships are adverse to customers because of information asymmetry + price haggling, and that online sales will hurt them -- but in many conversations with multiple different car industry insiders, they all say that dealers make almost no money car sales, and instead make almost all of it on financing, service and parts. That you can almost model the car dealing parts of a dealership as lead gen for the service desk / finance desk.

I don't know if that's right (anybody with more info care to comment?), but it's at least enough to give me pause on the "dealers will hate nonnegotiable pricing" claim.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#319

Post by xyzzy_plugh » Fri, Jun 03, 2022, 3:21 AM UTC

In many other parts of the world, even North America, the MSRP is the price of the car. There is no negotiating (at least, not upwards, and definitely not usually).

I don't understand why this is newsworthy? I bought a non-EV in the last decade by putting the order together online on the manufacturer's national website, then processing it through a dealership.

Buying a car in the US was so unnecessarily stupid because of all the haggling and pussyfooting around what the damn thing is actually going to cost.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#320

Post by krrrh » Fri, Jun 03, 2022, 3:21 AM UTC

paxys wrote: post #39

A lot has been said about the dealership model in the last few years, and the almost universal consensus is that it is an unnecessary and predatory industry and all auto makers should just sell cars directly like Tesla does. That being said, is there any counterpoint to this view? Are there any benefits that dealerships offer today over direct sales? What would we lose if we got rid of every dealership? If there is t…

A decent service and warranty experience is the point a lot of people make, and this has obviously become less important with EVs which require less ongoing maintenance.

Beyond that dealers provide distributed and localized inventory management. Modern car plants basically have to run at full capacity year round, but sales are much more seasonal and unpredictable given effects of gas prices and other economic factors, many of which can be regional. The dealers find underused land all over the country and have huge lots that allow for cars to be delivered on a consistent year round basis which provides efficiencies in the logistics operations since the trucking, shipping, and rail contracts can have permanent workforces and long term predictable contracts. When inventories pile up for specific models the manufacturer can provide incentives and dealers can innovate and adapt to take advantage of these using local knowledge of the conditions in their community in a way that manufacturers would have a harder time doing. Dealers can finance their floorplan using independent and local sources of capital for inventory and buildings which allows the manufacturers to extend operations without taking on additional debt, or putting their own finances at risk.

Some of these factors played more of a role in the past, when new car companies were building out their dealership networks and benefitted more from offloading risks to dealer partners. Tesla was able to innovate with their small showrooms in malls largely because they went for a long time with only a small handful of models, and because the buzz around the brand and vision meant that there has always been a waiting line (still the case), so they’ve never tried to compete for the “car broke down, need something new this week” market, which has had no choice but to head to well-inventoried lot.