A group of 26 Illinois Ford dealers won a legal battle last week that could short-circuit the automaker’s national EV certification program, challenging required fast charger installation and training programs costing upward of $1.2 million per dealership to sell and service electric vehicles.
The Illinois Motor Vehicle Review Board ruled in favor of the dealers Nov. 16 in their nearly year-old complaint against Ford, which alleged the program violated the state’s Motor Vehicle Franchise Act by cutting off EV products to those that didn’t pay up to participate.
“Technically, that was a home run for the dealers,” said Joe McMahon, executive director of the Illinois Automobile Dealers Association. “So pretty much, it’s an illegal program in Illinois.”
A Ford spokesperson said the automaker plans to appeal the decision.
Ford’s Model e EV program includes specialized training and infrastructure improvements for dealers — at their own expense — as the automaker aims to have electric vehicles represent 50% of its sales by 2030. The top designation, Certified Elite, initially required dealers to install two fast chargers by year’s end and a third by 2026. They also had to participate in EV training that cost $40,000 per dealership, according to the complaint.
A Certified designation required the installation of one fast charger and a $15,000 training program, but only allowed dealerships to sell a limited number of EVs. Dealers that didn’t get certified would not be able to sell or service EVs after this year.
“Ford stands by its voluntary Model e EV program,” Ford spokesperson Marty Gunsberg said in an email Tuesday. “It is designed to make sure that Ford and its dealers provide Illinois Ford EV customers with a segment-leading experience throughout their purchase, service and ownership journey. Ford will appeal the Illinois Motor Vehicle Review Board’s Final Order.”
In the wake of the Illinois ruling, Ford pushed back the required fast charger installation deadline to June 30, 2024. But Gunsberg did not attribute the delay to the legal setback.
“The later timing is in response to charger supply chain and infrastructure delays,” he said.
The Illinois Ford dealers filed the complaint in December 2022 with the Motor Vehicle Review Board, which is part of the secretary of state’s office. A hearing officer made a recommended decision supporting the dealers Oct. 14. The board issued a final order last week adopting the decision. It also awarded attorneys fees to the dealers and required Ford to pay more than $49,000 to the state to cover its expenses during the formal review process.
“We want Illinois automotive dealers to succeed, especially when it comes to selling electric vehicles, which is undoubtedly the future of the industry,” Secretary of State Alexi Giannoulias said in a statement. “Both Illinois dealers and Ford should focus on building a better customer experience, offering more options to vehicle buyers, and adapting to meet the demands of an evolving marketplace to ensure that Illinois dealerships and American vehicle manufacturers meet consumer needs — not only to remain relevant, but to thrive.”
The dealership decision comes as momentum for consumer EV adoption appears to be slowing, despite federal and state legislation to incentivize both manufacturers and car buyers to make the transition. The Biden administration has set a 50% target for EV market share by 2030.
Through 10 months, EV sales in 2023 represent 6.9% of total U.S. vehicle sales, up from 5.2% in 2022, according to car shopping website Edmunds. But EVs are sitting on dealer lots for an average of 57 days, far above the industry average of 40 days, as demand wanes. Hybrids, meanwhile, are gaining market share and selling in only 17 days, Edmunds said.
Tesla leads all brands, with a 57.4% EV market share. Ford, whose EV lineup includes the F-150 Lightning truck and the Mustang Mach-E, ranks third behind Chevrolet with a 6% share, Edmunds said.
In Illinois, Gov. J.B. Pritzker has set the goal of having 1 million electric vehicles on the road by 2030, but the state has a long way to go.
There are 88,632 EVs registered in Illinois as of Nov. 15, according to data from the secretary of state’s office. That’s up 60% from the same month last year. But EVs still represent less than 1% of the 9.8 million vehicles registered in Illinois, according to state data.
A dozen of the 26 Ford Illinois dealers that signed onto the complaint were based in the Chicago suburbs, including Al Piemonte Ford in Melrose Park, Bredemann Ford in Glenview, Highland Park Ford and Ron Tirapelli Ford in Shorewood.
One of the suburban dealers, who asked that he not be identified to avoid retaliation from Ford, participated in the Certified Elite program but declined to add the fast chargers by the end of the year. The dealer, who has four Level 2 chargers on-site, cited cost, infrastructure challenges and a lack of demand from customers for not upgrading to the more expensive fast chargers, which he said would have set him back more than $1 million.
“To buy something I don’t need for a lot of money is a ridiculous thing,” the dealer said, adding he has no plans to meet the extended June 30 charger deadline.
Beyond Illinois, Ford dealerships in New York and Florida are also challenging the EV certification program.
Participation in the certification program has dropped from 1,920 to 1,550 dealers since January, Gunsberg said. That means 53% of Ford dealers nationwide are buying into the training and infrastructure investments needed to sell Ford EVs going forward.
The automaker has reduced the requirements for participation amid the dealer backlash.
Initially, all Ford EV dealers were required to have five Level 2 chargers. That has been reduced to three Level 2 chargers for Certified Elite dealers and two for Certified dealers, with the requirement pushed back to June, Gunsberg said. While the Certified Elite deadline for adding two Level 3 chargers has also been pushed back to June, the third fast charger for 2026 has been eliminated, he said.
In addition, dealer training costs will be reduced by 50% in 2024, Gunsberg said.
“We made changes to the voluntary Model e EV Program as we continue to adapt our overall EV strategy to the market,” Gunsberg said. “We also continue to listen to dealer feedback.”
While acknowledging that the future is electric, the Illinois Automobile Dealers Association, which represents more than 700 dealers across the state, has been waging battles against EV disruption for years.
In 2021, the association filed a lawsuit against EV startups Lucid and Rivian, alleging they violate the state’s franchise law by building and selling vehicles directly to consumers. A Cook County judge dismissed the lawsuit in December 2022, but an appeal is ongoing, McMahon said.
As for Ford’s EV certification program, McMahon said the Motor Vehicle Review Board’s order leaves only one option for the automaker.
“They’ve got to get rid of the program,” McMahon said.
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