Are Car Dealerships Ready for the EV Boom?
January 27, 2022 | by Cameron Wolf
At the corporate level, major automobile manufacturers have made "all-in" commitments to electric vehicles, but the bigger question is whether this commitment is effectively communicated to the general public. When a new vehicle buyer walks into a dealership, is this objective consistent with reality at the dealer level?
The drive towards electric vehicles is wonderful news for the environment and for the planet as a whole, but it's creating some significant roadblocks for auto dealerships. Electric vehicles are significantly different from gasoline-powered cars, and many dealerships are having difficulty keeping up with the changes in sales methodology. Fortunately, new information, programs, and tools are coming out on a regular basis to help alleviate this transition. Here are some key concepts that aim to help car dealerships make the EV sales process easier.
First and Foremost, Education.
Education from the top down is key when it comes to electric vehicles. The dealership staff needs to be educated on the vehicles, what they can do, how they work, and what benefits they offer. They also need to be educated on the charging process. Many people are still hesitant to buy electric cars because they fear running out of charge.
Dealers have long argued that the biggest problem is their salespeople simply don't know how to sell EVs, because old habits are hard to break after years of selling ICE cars. Jason Savino, a digital operations director for All American Auto Group said that: "an EV customer is going to focus on the battery size, how many kilowatts it contains," “If a customer is buying [a Ford] Explorer, they’re not going to ask the range of the gas tank, how many miles until you’re empty, but for EVs the range is one of the most important things.”¹
Answering questions like this one are increasingly important. Here are some more examples frequently asked questions (and answers) that salespeople don't always have answers to:
What is an EV?
An electric vehicle (EV) is a vehicle powered by electricity and not gasoline.
Why would I buy an EV instead of a gas car?
There are many reasons to buy an EV instead of a gas car. They're often cheaper to operate, they're better for the environment, and they come with financial perks like tax breaks and other incentives.
Are there government incentives that encourage shoppers to buy EVs?
Yes, there are many government incentives to buy EVs. For example, in the United States, you can get a tax credit of up to $7,500 when you buy an electric car, combined with grants from your state and even local utility.
How much will my electric bill go up if I charge at home?
Region-specific data is required to answer this correctly, but in Detroit, MI, a 2022 Chevy Bolt EUV would cost an additional $40 per month if the daily commute was 60 miles. That's less than the cost of 2 tanks of gas per month at the time of writing ($2.95/gal).
If I'm not home, where can I charge?
Public charging stations are becoming increasingly common and most interstate networks have enough to get you where you need to go. You can also use apps like PlugShare, EV Connect, ChargePoint, EV Go and others to find charging stations near you. Auto manufacturers are releasing their own platforms to help you find compatible chargers as well.
Is it true I don't need oil changes? That seems too good to be true...
It's true! Fewer moving parts in a motor means less lubricant. In the case of electric vehicles, no oil changes will ever be necessary. In the case of the Nissan Leaf, gearbox lubricant changes remain, however, that is an isolated case. Maintenance costs are considerably cheaper:
I've heard about battery fires – are EV's dangerous?
Sure, fires are dangerous, however, EV’s are much less prone to fire versus an ICE vehicle:
Clearly, there are a plethora of inquiries that dealership salespeople will be asked and it is critical that these questions are answered correctly.
Break free from the gas-powered marketing and sales habits
Many car dealerships are advertising their electric vehicles on the same websites and pages as their gas-powered cars. This can be costly, because people looking for electric vehicles are going to be looking for specific keywords (i.e., "range", "incentives", etc.). If a dealership is cross-promoting EVs with gas-powered cars, they might not generate the most effective search results.
A great way to remedy this is to create specific pages and advertising campaigns for electric vehicles. Including incentive data, charge times, charge costs, and even trees planted takes it a step further with the potential buyer. With all of this information in one centralized location, it provides further cost clarity and convenience – something that is becoming very important to the consumer and can help the sales process. If cost clarity and convenience is something yet to hit mass dealership radars, it should be. According to Ernst & Young, “[their] research points to a growing desire for price transparency among car owners and non-owners alike, cited by 36% and 39%, respectively. These groups prefer to know upfront how much they can spend on an EV, while over 50% in both categories prefer a fixed final price for a deal with no haggling.”
Also notably, more and more consumers are shifting towards the online experience: "Two-thirds (66%) of potential car buyers prefer to get quotations and secure financing online, while 29% agree or strongly agree that completing paperwork online is preferable to doing so at the dealership."
For instance, Lithia Motors, a premier national dealer group and ZappyRide partner, created an entire marketplace for electric vehicles.
Outside of creating platforms for EVs, it's worth recognizing that many potential buyers are in need of a guide to helping consumers go electric. As aforementioned, today's buyer is moving to the comfort of their own home to learn about a vehicle, rather than visiting in-person. Provide the content and platforms necessary for people to learn about the advantages of electric vehicles, and they will come!
Use partners in the space
One of the most obvious, but sometimes overlooked, partners in the EV space is local utility companies. Utility companies can provide car dealerships with information on the best time to charge electric vehicles, as well as rate structures that make charging more affordable. For instance, the Detroit-based utility, DTE, provides time of use (TOU) rates and home charger rebate incentives for its customer base. If dealerships are actively aware of these ongoing programs with the utilities in the area, they can foster a mutually beneficial relationship in the push towards electrification.
Beyond the incentives, utilities are primed to help showcase EV inventories in their service areas as well. For instance, ZappyRide partner Austin Energy in Austin, TX most recently won the Chartwell’s 2021 Best Practices award for their EV inventory platform:
In addition, many utility companies are now installing charging stations in their service areas at no cost to the dealership. Even more-so, some of these chargers are proposed to be installed at the physical dealer location itself! This provides a valuable service to EV buyers and helps promote the dealership's electric vehicles.
Conclusion:
Helping dealers navigate this shift in technology is important, and it is entirely possible to teach an old dog new tricks! With the right tools and programs, car dealerships can successfully sell electric vehicles and define this growing market.
We have been fortunate enough to help major automakers, dealer groups, and utilities provide a space for EV education and action. Automakers like Ford have built platforms specifically for their EVs that factor incentives into the final purchase price. This can provide the cost-clarity that consumers are looking for in the purchasing process.
Utilities are building platforms and winning awards with their EV programs.
Nonprofit organizations and coalitions like Plugstar are getting in on the movement as well, building shopping assistant platforms to help shoppers find EVs, local incentives, dealers, test drives, and more.
The market is in full swing and the movement is here to stay. For dealerships, educating staff, creating partnerships with local utilities, and specific EV marketing will help get car dealers primed to take over in the race to electrification.
We are fortunate to have had a hand in these projects; whether it be building the white-labled platform or integrating API data, we’ve helped the EV curious crowd (1.6 million people in 2021) make more informed purchasing decisions. If you’d like to learn more do not hesitate to check out our EV shopper guide and/or chat with us.