How Can Dealers Innovate and Sell More EVs?
Recent news reports and comment boards reveal legacy dealerships are pushing first-time buyers away from EVs. What can they do to sell EVs?
Recently, a friend of mine went to an electric vehicle ride-and-drive event due to his interest in plug-in hybrids. My friend was searching for a PHEV but found himself driving a Ford Mach-e at the event for fun. During the test drive, the first thing out of the salesperson’s mouth was “that the Mach-e is quite new and there are many bugs to work out and the power grid can’t support electric vehicle adoption.”
Sound familiar? These aren’t aberrations when it comes to dealers and selling electric vehicles. This week, an Automotive News article reported that 400 Ford dealers dropped out of the Ford-e program. Electrek picked up the story, and in the comments section, readers torched legacy dealerships and their lackluster approach to selling electric vehicles.
One commenter said, “I'd hate to own or work at a dealership in 10-20 years. Hard times ahead.”
However, it’s not all bleak if creative ideas win out and action is taken going forward. In the same article, Ford Executive Chairman, Bill Ford said, “Rather than cutting out the middle man, the company was betting on the dealers, and we’re not going direct.”
So, what approaches could be incorporated now? One example is that KIA and Hyundai are identifying best-in-class (dealer lingo!) dealerships nationwide that will sell electric vehicle models at MSRP for 2024. The companies have heard many complaints from buyers about inflated EV prices, above MSRP prices at dealerships.
For Hyundai, this new program will have everyone rowing in the same direction so they can sell in volumes – the EV holy grail. In 2025, Hyundai Motor Group’s CEO said it will have its Georgia EV plant running and buyers can take advantage of the $7,500 EV federal tax credit.
Higher-priced KIA EV models over the last few years have put more money in those dealers’ pockets due to premium trim levels. This is not the case with all automakers. However, the bottom line is that Hyundai/Kia embraces the new technology.
Moreover, electric vehicles sell themselves on a fundamental level due to instant acceleration. A commenter on the Ford story mentions that average buyers don’t care about 0 to 60 mph, and I agree with that statement regarding traditional gas cars. However, electric vehicles are a step-change in technology due to instant acceleration.
So, how can dealers innovate? Dealers could also establish concierge services for post-purchase questions and add another $500 to the price. My blog, Plugged In Ev, helps with this very thing, and I’ve helped quite a few Ford Mach-e Mustang owners with home charging questions and scenarios.
There aren’t simple answers to EV use cases. It seems like an opportunity for dealers and would help brand and dealership loyalty. It could provide so many touch points for dealers with first-time owners and their journey.
Oh, yeah. First-time EV buyers. So, are you sitting down? Let’s connect the dots from a 2020 survey from Triple A. This survey of first-time owners via Recargo has always stuck out to me: “The majority (96%) say they would buy or lease another electric vehicle the next time they were in the market for a new car.”
Hello dealerships. This is the prize for new or innovative thinking but this is how it’s going for some legacy dealers. See below from Electrek’s comment board:
Ford: My wife and I were leaning towards the purchase of the MachE. We visited our local large Ford dealer and were told I'd need to pay an $8000 market adjustment. Was told I could look at one but didn't have anything to test drive. The experience was not good. Drove ten minutes to my local Tesla center and had a wonderful experience. They had the model we liked available to test drive ( without a salesperson )no sales pitch, just answered questions. Went home and ordered the Tesla on the Tesla app. Easy as could be.
VW: It’s actually better to let the unwilling dealers exit the program. I am sick and tired of my local VW dealer, who is completely incompetent in the ID.4. The area has 5-6 VW dealers. I’d rather have 1-2 willing ones who understand how to work on EVs and have competent techs than have 5-6 that have no clue in EVs and are reluctant to sell them or service them.
Look, there will be winners and losers. Automakers and dealers embracing change and innovation will be big winners in the long run…and maybe in the short run. And I would be remiss if I didn’t mention the existential climate issue staring us in the face. It seems like another opportunity and a way for dealerships to “massage” past stigmas and rebrand themselves.