Ford continues to invest in internal combustion, looking only at online sales,

Jim Farley, CEO of Ford, believes that the industry is undergoing major changes and that the way it operates, the industry is increasingly shifting to electric vehicles. In particular, he believes the dealer model needs to change.

“It simply came to our notice then. We have to go 100% online. There is no inventory (at the dealership), it goes directly to the customer. And 100% remote pickup and delivery, ”Farley said during Bernstein’s 38th Annual Strategic Decision Conference recently. “I think our dealers can do it. But the standard is going to be cruel. They’re going to be a lot different than they are today. “

The CEO praised Tesla and the Chinese automakers for their sales approach, as keeping fewer cars in the dealer lot could save Ford a considerable amount of money. The automaker estimates that its distribution model costs about $ 2,000 more per car than the Tesla non-dealer system. It says two-thirds of it is spent on inventory sitting in dealer lots and public advertising, the Detroit Free Press reports.

Read more: Jay Leno experiences F-150 lightning strikes with Ford CEO Jim Farley

Farley was particularly opposed to advertising, saying sales and storage for the F-150 Lightning and Mustang Mach-E took place without much advertising. The main thing, he said, is building loyalty among its existing customers, not spending money on Super Bowl advertising.

“If you ever see Ford Motor Co. advertising Super Bowl on our electric cars, sell the stock,” Farley said.

This does not mean that dealers are completely obsolete. The company is working with its network to focus on specialized services. Citing retail giant Target, Farley noted that the company used its brick-and-mortar stores to expand personal services to customers and incorporated a digital component to compete with Amazon’s preferences.

“Our model has become random,” Farley said. “We spend $ 600 or $ 700 to promote the car and we don’t spend anything post-warranty for the customer experience.”

To remedy this, the company should focus on providing a better experience by helping customers with software updates, providing complimentary details and other services. It is a model inspired by the Tesla method in Norway where it maintains a dealer network as opposed to North America. Because the customers there want service not just sales.

Future success, though, will require Ford to get it right for the first time and reduce its costs to repair the error. “The company has to be radical,” Farley said [its] Quality ”and also reduces the cost of the battery. The CEO added that for all that, the company needs to hire top talent from Apple and Tesla’s favorites “even if they do 10 times more than I do.”

But the focus will not be entirely EVs. Even if this is the way forward, Ford still needs to focus on what it makes.

“If you are a super duty customer of 10,000 pounds in Montana or on the northern slopes of Alaska,” he said. “An electric car is a terrible solution, the batteries are very heavy.”

This means that while Ford is spending billions on its electric future, it will continue to invest in internal combustion engines so that it can continue to serve a customer base that generates huge profits for it now.

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