JAKARTA - As more and more automotive manufacturers switch to electric vehicles, the behind-the-scenes issues related to after-sales maintenance and support are beginning to emerge. One of them concerns the battery replacement payment scheme for electric vehicles (EV), which is now dragging Ford into the legal realm in the United States.
Ford is facing lawsuits from two dealers in New York, Jericho Turnpike Auto Sales and Patchogue 112 Motors. Both, accused the manufacturer of paying for EV battery replacement far below the actual repair value.
Reported by Carscoops, Monday, December 15, the lawsuit has been filed in the United States District Court. This issue also has the potential to widen after the dealer's legal team said they were preparing similar legal steps in a number of other states.
It is not impossible that all of these cases will be combined in the form of a class action, which of course increases the legal risk for Ford. In the lawsuit, both dealers accused Ford of avoiding state legal obligations related to the replacement of warranty costs.
Ford is said to have implemented a low fixed payment for a full replacement of the EV battery pack, instead of bearing the actual repair costs that dealers must incur. Jericho Turnpike Auto Sales claims to have carried out 15 EV battery replacements on Ford models since the beginning of 2024.
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Of this amount, Ford allegedly only replaced the cost of 600 US dollars (equivalent to Rp9 million) per battery for 13 jobs, even though the actual cost per replacement reached around 22,600 US dollars, or Rp376 million.
The total difference in question is said to reach 286,200 US dollars. In the other two cases, Ford reportedly paid 13,000 US dollars or the equivalent of Rp. 216 million per battery, but the amount was still considered not to cover the full cost.
Patchogue 112 Motors reported a similar pattern. The dealer stated that it only received a replacement of 600 US dollars per battery, far from the cost they incurred for the same work. The core of this lawsuit highlights the compensation mechanism for franchise dealers for warranty repairs and service contracts.
Under state law, manufacturers are required to bear the cost of repairs in a reasonable manner. Manufacturer service contracts also may not set rates below the prices and rates that authorized dealers charge non-warranty customers.
The rules include the cost of spare parts plus a 40 percent profit margin. In addition, dealers are allowed to apply a standard non-guaranteed retail profit margin on labor costs, which can range from 70 to 200 percent, depending on the type of service.
The lawsuit alleges Ford did not comply with those provisions. One of the lawyers representing the dealers, Leonard Bellavia, told Automotive News that this case was not a single incident.
He said his law firm was filing similar claims against a number of other car manufacturers in various states, with the same pattern of problems, namely the alleged failure to fulfill warranty payment obligations.
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