The future is electric, finds a study by consultancy Ernst & Young.
The study predicts Europe will sell more electric vehicles (EVs) than internal combustion engine (ICE) vehicles by 2028, China will reach this threshold in 2033, and the United States in 2036.
Gabe Garroni, senior vice president – dealer financial services for Ally , an early EV adopter himself, predicts dealer services will remain stable as the country transitions to EVs. For instance, the purchase and finance process are unlikely to change. But the EV evolution will spark opportunity for auto dealers positioned for the transformation, he says.
“Dealers should be prepared for a different ownership experience for customers,” he says. “Electric vehicles represent a significant shift in vehicle technology. Consumers will need more education about their new vehicles. And dealers must consider how EVs might change fixed operations or service departments.”
However, readying for change will not involve sizeable capital outlays. Manufacturers will support the nation’s franchise dealerships with dealer education, tooling, and other support for the coming EV evolution.
“This is a departure from the Tesla model, which does not sell vehicles through franchise dealers,” Garroni says. “Having the main OEMs get into the EV game bodes well for franchise auto dealers. They will get a lot of direction and support from their OEM partners.”
No one likes change, and dealership employees and consumers are not immune. It will be incumbent upon dealers to build excitement around EVs among consumers and staff alike, according to Garroni.
Fortunately, the path to enthusiasm is already laid out, he says, and dealers just need to keep interest high.
“There is already a buzz around electric vehicles; that’s why OEMs have committed to building more and some plan to go fully electric in the future. Consumers also are very engaged and hopeful about electric vehicles,” he says. “Dealers need to harness that enthusiasm and go a step further than OEMs. They must build excitement in their individual models.”
Garroni advises dealers to get involved in local EV clubs and associations. “There is a lot of passion happening with this movement,” he says, noting knowledgeable users and EV ambassadors fill these groups.
“Being a part of an electric vehicle society can expand your thinking beyond just selling electric vehicles,” he says. “How can you support electric vehicle networks? What additional accessories can you sell?”
Dealership sales teams must be ready to support first-time EV owners. Garroni says it’s critical to focus on the ownership experience. “That’s where many consumers will be anxious and uncertain. They will need guidance because it’s a new experience,” he says.
He recommends letting employees test drive EVs or take them home for a few days and offering incentives to encourage them to purchase these vehicles. “The best way to advocate for something is to become a fan. Let employees experience what it’s like to find a charging station and go through some of the anxiety that a new EV owner might experience,” he says. “The real key is to create some empathy through experimentation and through experience. That’s your best teacher with EVs.”
As employees become more familiar with EVs, dealers can host walk around competitions. Challenge employees to give their best walk around or demonstration of an EV and “see what they come up with and what they point out as differences between internal combustion engine-powered vehicles and EVs,” he says.
Taking these steps fosters a better understanding of the EV community’s needs. For example, if dealer employees discover finding charging stations is a key concern, the dealership might invest in charging networks with covered charging stations and invite customers to charge their vehicles.
“These visits become a social exercise where you get to know your customers better. Charging an electric vehicle can take 30 to 45 minutes,” he says. “It’s up to individual dealers whether they want to extend charging capabilities to customers as a service or charge them. Either way, charging stations will be a pressing need.”
Walk the Talk
Walk the talk for EV vehicles, adds Garroni. Go beyond just selling EVs and make the dealership more sustainable.
“Ask yourself how you can become more environmentally sound,” Garroni says. “When you think about these core values and make them part of your culture, it will attract more customers and more employees. And it becomes an opportunity to cause some significant attitudinal changes in the auto industry.”
Maybe you exchange traditional lot lighting for LED technology. While LED luminaries cost more than traditional fixtures up front, the lamps last longer and save energy, leading to cost savings up to 50%. Perhaps you install solar energy panels to supplement electrical power needs. Or maybe your dealership uses green suppliers, goes paperless, or recycles; the sky’s the limit for internal sustainability efforts.
Make Maintenance Shifts
All that glitters is not gold, and with EVs it’s the maintenance shifts that pose the greatest challenges.
“There will be a shift in maintenance schedules; electric vehicles require different maintenance. The emphasis here is on different,” he says. “It’s not that it’s less or more, it’s that the maintenance is unique and different.”
EVs, for example, do not need regular oil changes, but they still need brake replacements, suspension repairs, new windshield wiper blades, and cabin filters. Tires need more attention because EV tires wear faster.
And even if every automaker stops producing ICE vehicles, gas-powered vehicles will remain on the road. It may take decades before roads are free of them. This means dealers must be ready to service both vehicle types, Garroni says.
The landscape for service also changes with EVs. Many times, technicians can handle EV service intervals remotely or at a customer’s home. With the amount of technology and software on today’s EV and gas-powered vehicles, OEMs increasingly handle minor bugs or software updates over the air
“Technicians can do most EV repairs and diagnostics through a laptop. In my personal experience as an EV owner, most of the repairs on my EV happen in the garage at my home,” he says. “This allows dealers to adjust their operations. They may not need to commit to a new service building or add separate infrastructure for EV service.”
Look at Labor Needs
A TechForce Foundation report from 2020 noted the industry would be short approximately 642,000 technicians (automotive, diesel and collision) by 2024. How do electric vehicles affect an already stressed labor pool?
“Finding qualified service technicians is one of the biggest challenges facing automotive dealerships today,” Garroni admits. But he believes EVs offer an opportunity for dealers to grow their labor pools.
There is the perception that service technicians are mechanics doing “dirty jobs.” Even as organizations, like Ally, strive to change this narrative, other fields still hold greater appeal. “It’s been difficult to attract labor from more established technical industries and mindsets,” he says.
The sophisticated technology employed in EVs will transform automotive technician work. “These will not be your typical wrench-turning jobs,” he stresses. “It provides an opportunity for dealerships to attract employees with a different set of qualifications and a different mindset about the automotive business. There is true enthusiasm and passion around EVs. It’s something dealers can tap into.”
Ronnie Wendt is an editor at F&I and Showroom and owns In Good Company Communications, a business focused on writing for the automotive and RV industries.