Our beloved industry is in flux for many reasons. Mostly due to the pandemic that revealed how fragile our supply chain had become. Many believe it was the advent of JIT (just-in-time inventory management) in the 80s which has been our manufacturing and supply store credo ever since. JIT put us on the path of things like the chip shortages that strangled vehicle manufacturing for years. That debate is for another day but it did create opportunity in that it forged a conduit for transformation in a few key ways.
One was the ability for dealers to sell vehicles they don’t have fueled by the acceptance of buyers forced to order and wait for the vehicle they wanted. The second was the accelerated growth of digital acquisition and digital retailing due to pure necessity. The third was the accelerated increase in new vehicle MSRP. Electric vehicles like Tesla have historically been out of middle America’s price range. Post-pandemic, New ICE vehicles are often more expensive than their EV counterparts. All of these shifts were needed for electric vehicle adoption to have any chance of becoming mainstream. The good news is they happened and they are here to stay.
In the wake of these shifts, it is becoming increasingly imperative for automotive dealers to buy into that fact of EV permanence and not wait for them to become a sizeable share of VIO (Vehicles in Operation) to start their transformation journey. If they do, it will be too late. Transforming automotive dealers into EV retailers requires a multi-faceted approach that involves a paradigm shift starting from the leadership team throughout the entire organization. An undertaking like that requires much planning and specific execution strategies while not disrupting the consumer experience or the P&L. With that in mind, let’s take a high-level look at a few areas of focus remembering this is only a start.
1. Education and Training: Dealerships need to be educated and trained on the benefits of EVs, how they work, and how to sell them. This includes training on the technology, charging infrastructure, and incentives available to customers. A good start is to find or create subject matter experts to help train the staff, be part of the dealer strategy creation, and assist in EV appraisals and desking deals. At least in the beginning as the staff is being trained.
2. Infrastructure: Dealerships need to invest in the necessary infrastructure to support EV sales, including charging stations, service bays, and trained technicians. Having public-facing stations that are available to all makes and models can quickly bring in the curious and the adopted that may be your next EV or ICE customer.
3. Marketing and Sales: Dealerships need to develop marketing and sales strategies that focus on the benefits of EVs, such as lower operating costs, reduced emissions, and improved performance. This includes developing targeted advertising campaigns, offering test drives, and providing financing options. Staff videos of new EVs in the dealership, as well as ownership experience videos of customers and employees, can turn your dealerships into the premier full-scale EV experience center in the area.
4. Incentives: Governments and other organizations can provide incentives to dealerships to encourage them to sell more EVs. This can include tax credits, rebates, and other financial incentives. Why go at it alone if you don’t have to? Do your research and find out what is available for you to upgrade and enhance your current infrastructure.
5. Collaboration: Dealerships can collaborate with other stakeholders, such as EV manufacturers, charging infrastructure providers, and utilities, to develop a comprehensive strategy for promoting and selling EVs. This is what we see with Ford and GM as they collaborate with Tesla to shorten the learning curve and grow their influence in the industry. Dealers can do the same thing by leveraging their OEMs, their vendors, and the public to create economies of scale to save time and money.
Transformation is not coming, it is here. The adoption curve reached 5% in 2022 and is expected to reach 10% in 2023. By 2030 estimates say 30% of all vehicles in operation could be EVs. More importantly, the largest EV vehicle manufacturer is Telas and they have hundreds of thousands of EVs about to have their 3 to 10-year birthday. Those vehicles will most likely end up in your used car inventory for resale. Understanding how to acquire, recondition, sell, and service EVs will be a way to close the gap with the ICE (Internal Combustion Engine) used vehicle shortage in the market today. By taking the steps above, and others, automotive dealers can transform themselves into EV retailers and help accelerate the transition to a more sustainable transportation system. If you need assistance, reach out to the BEVEverything team for a deeper dive into your EV transformation strategy.
Co-Founder, BEVEverything, Inc.