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impact of EVs
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Auto Dealers Wake Up To The Impact Of EVs On Their Lots

Most dealers have reconciled themselves to the fact that EVs are important to the growth of their dealerships. Now they need to come up to speed on what it means to own an EV so they can be gentle guides for a whole new consumer base.

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Dealers look out onto their showrooms and now see EVs joining their inventories. With the additions come pressure to turn over supplies — in late June, 2023, the days’ supply of EVs was over 100, whereas industry-wide inventory levels were closer to 53 days. The impact of EVs on US auto dealerships has never been more keen than right now.

EV sales keep growing. Global plugin vehicle registrations were up 70% in April 2023 compared to April, 2022; plugins represented 14% share of the overall auto market. By June, the average price paid for an EV was down nearly 20% year over year.

A confluence of effects is creating buzz in the EV world.

  • New battery production facilities are popping up around the country, inspired partially by government incentives.
  • Automakers are retooling their factories in order to support EV production.
  • The United Auto Workers will be negotiating their labor contracts later this year, with EVs as a core topic of common interest.
  • Consumer interest in EVs is at an all-time high.

Survey Says…

A June, 2023 Cox Automotive survey shows trends continue to place EVs in an increasingly favorable light.

For example, 91% of consumers who walked into a showroom had pre-selected their vehicle of choice. Fewer consumers than ever are concerned about battery replacement costs (27%) or lack of charging stations in their area (32%). The most significant data point shows a dramatic increase in consumers who are considering an EV purchase within the next 12 months: 51% vs. 38% year-over-year (YoY).

While 53% of consumers agreed that EVs will eventually replace traditional ICE-powered vehicles, dealers were more cautious, with only 31% agreeing on an all-EV future. In fact, 45% of dealers feel that EVs have yet to prove themselves in the automobile marketplace.

Despite concerns, 57% of dealers seem to have reconciled themselves to the fact that EVs are important to the growth of their dealership. The majority expect to integrate them in less than 2 years. Perhaps that expectation of EV growth and importance derives from the fact that 82% of dealers are now required by their OEM to make an EV investment.

Meanwhile, dealers need to learn more about battery lifecycle, battery health, and overall servicing of an EV, according to the Cox Automotive survey. 63% of dealers are slightly or or not at all familiar with battery diagnostic tools.

The key takeaways from the survey are:

  • EV consideration is growing more rapidly than sales: While 51% of vehicle shoppers now indicate they are considering an EV, the EV share of total sales in the US in 2023 is anticipated to be less than 8%. Affordability continues to be the top barrier for many shoppers.
  • There’s a large gap in EV readiness between consumers and dealers: Consumer adoption of EVs is expected to grow as more models hit the market, but dealers are not yet prepared to support an influx of customers in sales or service.
  • Support from OEMs is needed to close the readiness gap: Dealers are thirsty for EV information to ensure they are the go-to resource for customers and look to OEMs for guidance in learning more about EVs, specifically in the areas of charging and batteries.
  • Sales will come, but equipping dealerships with EV servicing capabilities is crucial in the near term: The likelihood that an EV buyer has made the purchase decision before visiting a dealership is high. Still, current owners prefer dealerships for servicing and maintenance, where over half of dealers are not fully prepared.

Cox Automotive concludes that EV sales growth and filling the gaps in infrastructure to support EV mobility continue to be the industry’s leading story.

The Impact of EVs on Car Dealerships: Change is Here

Electric mobility is multi-dimensional. It is a systemic innovation that calls for the involvement of many stakeholders whose contributions are important to make the whole system work.

The EV learning curve for dealers is quite steep, it seems. Less than half of dealers feel extremely prepared to sell or service EVs. That dealer discomfort doesn’t seem to affect consumers who need maintenance on their EVs, however, as 57% of EV buyers say their prefer dealerships for maintenance needs.

Auto dealerships traditionally rely on a large inventory of gasoline-powered vehicles to meet diverse customer preferences. With the rise of EVs, dealerships must adapt their inventory management strategies. They need to develop expertise in assessing market demand accurately, ordering the right mix of EV models, and staying abreast of rapidly evolving technology.

We live in an era of everyday data collection and subsequent analytics. The effective use of data interpretation tools can be an important factor to share customer receptivity in new product success. Such tools can assist dealers to understanding the dynamics inherent in EV ownership — which then should guide dealer interactions with customers.

  • The availability and accessibility of charging infrastructure: Dealers should create their lots as welcoming spaces for charging. Yes, that may mean that only their customers may have permission to charge, but other businesses have created incentives that cultivate their customer base in similar ways. Dealerships should also be liaisons to the local governments to recommend best siting for public charging infrastructure. It is wiser to join in the charging infrastructure fight than to stand by and bemoan its current deficit.
  • Get thy staff trained — quickly — about EV ownership: We’ve come a long way from just a few years ago when I was charging my Leaf at a Nissan dealership and a salesperson challenged me about my satisfaction with driving an EV. Dealers today should assign staff members different EVs in the brand catalog to drive — there’s nothing like experiential learning to inspire meaning-making. Let them become immersed in the day-to-day reality of charging requirements, managing range, figuring out digital features, adjusting to regenerative braking, and personally assessing how an EV compares to legacy ICE vehicles.
  • Offer free consumer educational workshops: What better way is there to develop a new consumer base than to welcome potential customers into the showroom with the goal of filling in gaps of EV knowledge? It offers dealers an opportunity to dispel rumors and misinformation and to answer questions in a low-risk environment. Because using technology really needs 1-to-1 assistance and hands-on engagement — so different than book learning — dealers should provide peak weekend test drives. Visitors now will become loyal customers later, remembering how they were invited to learn without pressure or strings attached.

Final Thoughts about the Impact of EVs

The dynamic growth of the EV market is due to 3 main driving forces, which interact and multiply each other’s influence:

  • Government policies aimed at tightening emissions requirements while subsidizing the transition to EVs, including the development of charging infrastructure
  • Automakers that are already investing heavily in the development of electrified vehicles in order to avoid losing their share of a promising market
  • Consumers who are becoming more demanding in terms of environmental friendliness and efficiency, with many of them ready to transfer that eco-awareness to EVs

Sure, there continue to be dealers who refuse to engage with EV sales; they will all-too-soon find themselves lost in a barren dealership desert. Most dealers, however, are suddenly realizing that they have to take EVs seriously, and soon. The transition to EV sales does present a series of challenges for auto dealerships. As with any shift in practice, change comes slowly and with great trepidation. However, EVs offer dealers an opportunity for a refresh and reinvigoration, for growth and innovation. By not only accepting but taking an active lead in the transition to EVs, dealerships can become visible leaders promoting the good of the community — and their bottom lines.

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Written By

Carolyn Fortuna (they, them), Ph.D., is a writer, researcher, and educator with a lifelong dedication to ecojustice. Carolyn has won awards from the Anti-Defamation League, The International Literacy Association, and The Leavy Foundation. Carolyn is a small-time investor in Tesla and an owner of a Model Y as well as a Chevy Bolt. Please follow Carolyn on Twitter and Facebook.


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