“Then we have this opportunity to use our physical presence to outperform [competitors]. I think our dealers can do it. But the standards are going to be brutal. They’re going to be very different than they are today,” he said.
The move away from dealerships carrying extensive inventories of cars should save Ford money; the company says that its current distribution model adds around $2,000 in extra costs per car compared to Tesla. A third of that cost is tied up in inventory, and another third is spent on advertising.
“Our model is messed up. We spend $600 or $700 on the vehicle to promote it, and we spend nothing post-warranty on the customer experience. The problem is, on a parts business, which historically has been very profitable, we only get, maybe, only 10 or 20 percent of the customers come back to us,” he said.
He also doesn’t see the point in advertising a car that’s already sold out. “If you ever see Ford Motor Co. doing a Super Bowl ad on our electric vehicles, sell the stock,” he said.