Yahoo Finance’s Pras Subramanian joins the Live show to discuss Ford’s seventh-generation Mustang, the ‘Dark Horse’ as well as how Ford is giving dealerships the option to become EV-certified.
- Welcome back, everyone. Ford has unveiled its all-new seventh generation Mustang. Joining us now to break down the latest vehicle and what it means for the motor company is Yahoo Finance's Pras Subramanian, fine consumer of all things fine cars.
Pras, what do we know about this one so far?
PRAS SUBRAMANIAN: Yeah, you know, new Mustang out, throwing a bone to the old fans with gas-powered engines here, a four-cylinder Ecoboost that they say is more efficient, and then a more powerful V8 5.0 that I know, Soz, you're a big fan of.
Updated interior-- actually the interior, actually more fighter cockpit-esque, they're saying, with a wraparound sort of digital. So it looks pretty cool, actually. But I think the big news there is that whereas the hybrid or electric powertrain, you're seeing Dodge go there, you're seeing Chevy going--
- Yeah, why are they still making this thing?
- Should have stuck a V12 in there. Come on.
- No, seriously, though, why are they still making this thing?
PRAS SUBRAMANIAN: You know, it's a good question to ask. Because Jim Farley is going really hardcore with the EV transformation. I think it's just that he recognized that the people that buy Mustangs, they want that engine in there, at least for now. Maybe down the line, we might see an electrified or hybridized version that's like a special edition near the end of the seventh generation's run. But as of right now, it's just two gas engines.
- It's unusual. We also heard Ford speaking on the EV side again, which is sort of contrary here. It's asking dealerships to invest more into electric vehicles and to get what they call an EV certification. What does that mean? How is it-- how can we do the read-through for that into their attempt to try to catch Tesla when it comes to EVs?
PRAS SUBRAMANIAN: That's exactly that. And it's even more of a directive, right? That they're saying at a dealer event-- "InsideEVs" reported in Las Vegas that Ford told dealers that, hey, you have six weeks to decide whether you want to be Model E certified or Model E Certified Elite, meaning you've got to invest money, $500,000 to $1 million, investing in EV infrastructure at the dealers. So DC chargers, other charging equipment, training equipment in the dealership, or servicing in order to sell the EVs-- if you don't do that, you won't be able to get EVs beyond 2024.
So the first certification is you either pay for one charger and some training, probably around $500,000-ish in investments. And you get a cap on the amount of EVs you can sell. The next certification, more DC charging, about $1 million in investments per dealer. And then you can sell as many EVs as you can get your hands on.
- Well, we saw that there's still a long way to go. If you want to really take that cross-country trip, if that's still a thing, I mean, there needs to be a lot more chargers.
PRAS SUBRAMANIAN: Right, in general, right? This is just putting them in dealerships. But exactly right. We just saw yesterday, President Biden talking about that $900 million investing into the kind of highway system for, eventually, 500,000 chargers across the country. But a lot of analysts say we need more than double that to really feed our needs.
- Just super quick-- I'm sorry, go ahead.
- No, all I was going to add on that-- because so many of the orders, even for the vehicles that are going to be electrified that Ford has already been able to serve through or at least sell through at this point in time, they haven't been delivered yet in mass.
PRAS SUBRAMANIAN: Right.
- And so much of that has been online reservations. So what is the pivot that they're expecting for that to go over to dealerships?
PRAS SUBRAMANIAN: That's a good question. So one of the things that Farley wanted to address was, hey, in order to compete, we've got to have fixed pricing. We've got to build to order the vehicle. And that's what you pay for. That's why Tesla works, right?
So what the dealer structure-- as it is, dealers can set pricing. But Ford is telling them, whatever price you put online, that is the final price. You cannot change that. So buyers can cross-shop across dealers for cheaper cars. But once that price is on the website, that's it. You cannot add any kind of markups and things like that.
So they want to make that process--
- That's a big change.
PRAS SUBRAMANIAN: Yes, yeah.
- So between that and these fees that they're asking the dealers to pay, are they going to get pushback from the dealers? I mean, the dealer network is really important still to Ford.
PRAS SUBRAMANIAN: Yeah, I mean, I bet you'll see a certain percentage of them say, you know what? We don't want them. We'll just stick with the traditional cars, the F-150s, the Mustangs, as we just saw, and sell gas part.
And then you can revisit that later. You can actually say, you know what? In five years' time, you can say, hey Ford, can we revisit this certification? And they will open that up apparently.
- Let me know when you get that Mustang for review. We'll hit the town.
PRAS SUBRAMANIAN: Oh, yeah. Yeah.
- We'll hit the that town. OK, thanks. Pras Subramanian, thanks so much.