Hey everybody, welcome back to the Elon Musk. Podcast. This is a show. Where we? Discuss the critical crossroads, the shape SpaceX. Tesla X, The Boring Company and Neuralink. I'm your host, Will Walden. Tesla's major competitor, Ford Motor Company is urging its dealers to halt their investments in the EV certification program amid upcoming changes to the program. Now this request comes as the company plans to introduce
updates to its EV strategy. Responding to the evolving market dynamics that are going on right now. Now the CEO of Ford, Jim Farley, announced in December of 2022 that 1920 dealers would join Ford's EV sales program. However, since then, several dealers have opted out, leading Ford to revise its EV strategy. Marty Gunsberg, a Ford spokesperson, confirmed that as of December, dealer enrollment for 2023 has dropped to just about 50% for about 2/3 a year
prior. This decline is attributed to changes in the market, prompting Ford to ease some program requirements. Now. Last year, Ford reduced the number of required Level 2 chargers and extended the installation timeline. Andrew Frick, who's the president of Ford Blue, indicated that further changes are forthcoming. Frick said there's a lot that we'll be reviewing now. Ford plans to meet with his dealer council next month to finalize updates, taking into account feedback from nationwide
meetings with dealers. Now Ford has asked dealers to pause their investments in the EV certification program until mid June. The company aims to provide more informed guidance based on the forthcoming council discussions, Frick said. We don't want them to make any decisions between now and the middle of June, emphasizing the need for dealers to wait for more detailed information before proceeding with their investments. Now, one significant concern among dealers is the shifting EV
market. Ford has allayed some of its EV plans and is focusing on smaller, more profitable EV models, aiming to better align its dealer network with these new objectives. And while Frick did not disclose specifics, he noted that both the dealer console and executives are reliant on the process. Based on feedback from the dealer meetings recently, Ford has sought cost cutting ideas from suppliers to make its E VS
more affordable. The Model E unit posted a $1.3 billion loss in quarter one and a $4.7 billion loss last year. A Ford anticipates a $5.5 billion loss in its EV business this year. Fairly emphasized that Model E must stand on its own. Ford projects that its next generation E VS will become profitable within a year of their launch. Meanwhile, the company is introducing more hybrids to bridge the gap.
Now the request for dealers to pause EV investments follows A comprehensive review of feedback for over 1000 dealers across 11 meetings during a recent dealer engagement tour, they said. We're now in the process of reviewing all that collaborative engagement and turning it into intermediate, midterm and long term changes where it makes sense for our customers, our dealers and Ford. Specific details will be shared
in the coming weeks. Changes to the EV certification program last November reduced the requirement for L2 chargers from 5:00 to 2:00 for certified status and from 5:00 to 3:00 for certified Elite status. The need for a Level 3 fast charger by 2026 was also removed. Now Ford's Model E-business unit has faced financial challenges leading to a delay in $12 billion worth of EV related spending due to slower than expected EV sales growth impacted by affordable issues and insufficient charging
structure. Now as of December 2020, two 2/3 of dealers had signed up for the EV charging program. Currently, about half of Ford's dealer network is enrolled. The program has faced legal challenges with varying results. Now, Ford's dealer console meeting next month will address the feedback received from the recent dealer tour aiming to refine the EV certification program and possibly other business areas, they said. Our plans are really aimed at simplifying and reducing complexity.
The company will review everything from floor plan assistance to Model E standards and Ford credit policies. And the EV certification program has been controversial due to significant investments required for dealers. Despite multiple revisions, Ford has seen a substantial drop in dealer participation. Ford continues to develop future EV models and aims for increased affordability, including a rumored next generation electric pickup.
Now the company remains committed to adopting its strategy to changing market conditions. What was great is that we. Had candid. Conversations around every aspect of the business, nothing was off limits, said Frick. Its collaborative nature of the recent dealer meetings. Hey, thank. You so much for listening today. I really do appreciate your
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