Ford has issued a rare warning to its US-based dealerships to conduct businesses ethically or face the repercussion of being unable to receive F-150 Lightnings, in hopes of putting a stop to dealerships’ unethical price hikes.
Ford’s F-150 Lightning electric pickup truck saw its preorders surpassing the limit of 200,000 units ahead of time, though the automaker’s production capacity for 2022 is expected to reach only about 80,000 vehicles, thereby giving room to dealerships for shenanigans.
Since mid-December 2021, there have been whispers of car buyers receiving notices of ADMs for early deliveries. Ford is understandably indignant.
The gist of the text messages from the dealership is that it is able to obtain only a small number of vehicles in 2022, despite preorders numbering in the 200s. If prospective buyers wish to be among the first 25 to take delivery, then a US$30,000 ADM is needed. If buyers wish only to reserve their preorder, then a US$10,000 fee is needed.
Another dealership is relatively more courteous in that it is charging only a US$5,000 ADM, though only the first 10% of car buyers that both respond and agree to the price hike can receive the chance to take deliveries in 2Q22.
▲An email from a Ford dealership notifying prospective buyers to reserve their spots on the list via ADM. (Source: TOO)
With preorders filled to the brim, dealerships across the board discourteously concluded their messages with this: “…if you no longer have interest in the lightning please let us k now and we will remove you from the reservation list as well.”
Ford announced on January 9 that all dealerships must act morally. Those who are found to be immoral will have their allocation of Lightnings for the year revoked.
“It has come to our attention that a limited number of dealerships are interacting with customers in a manner,” says Andrew Frick, Vice President, Sales, U.S. and Canada. “[T]hat is negatively impacting customer satisfaction and damaging to the Ford Motor Company brand and Dealer Body reputation.” He stated that dealerships should avoid misleading, deceiving, and illegal advertising/selling/conducting businesses. Once these atrocities are discovered, Ford will reserve the right to deliver F-150 Lightning vehicles to the offending dealerships and transfer said vehicles to other dealerships, at least until the end of 2022.
The other possibility that Ford has taken into consideration is that, once a product experiences massive shortage, then the first batch of buyers may resell their acquisitions at a higher price, much like the iPhone 4 shenanigan years ago. In this light, Ford has therefore recommended that dealerships amend their sales by adding a “no resale within one year of purchase” clause. Buyers who violate such a clause would not only face prosecution, but also have their transaction revoked, presumably retroactively.
However, dealerships are not charities. Ford has no actual say over how dealerships operate, not even with regards to retail prices or the sales process. It would stand to reason that a ban on resale would be even less feasible, since car owners will unlikely accept such a condition, for a wide variety of reasons. After all, who knows whether the F-150 Lightning really is as good as Ford claims?
If one compares this event to the iPhone shortage, which is perhaps a more relatable experience, then one may ask the question of why anyone would pay an additional 30% or even 50% for the privilege of receiving their cellphone early. However, for those who want instant gratification, if paying extra affords priority delivery, then, as the facts would prove, quite a few of these people would be willing to shell out the money. At the time, even preorder spots can be sold, let alone actual phone scalping.
Ford expects to manufacture the F-150 Lightning in 1Q22 and kick off delivery in April at the earliest. The first batch of these electric trucks will cost almost US$100,000, which is calculated from the price tag of the flagship model along with the ADM and surpasses the retail price of the Porsche Taycan.