Car dealers are spending money to prepare for what many expect to be a coming wave of new electric models from manufacturers, installing charging stations, upgrading service bays and retraining staff to better accommodate the new technology. Many are not so sure “middle America” is ready yet, citing a distinct lack of existing charging infrastructure outside major cities.
The buzz – particularly from investors and major car manufacturers is real – but many car dealers are still struggling to square that enthusiasm with the reality that battery-powered vehicles made up fewer than 2% of U.S. auto sales last year.
In the meantime, auto makers are moving aggressively to expand their electric-vehicle (EV) offerings, with dozens of new models set to arrive in the coming years. Some, like GM, are setting firm targets for when they plan to phase out gas-powered cars entirely. This puts many dealers in a delicate spot: They are trying to adjust, but unsure whether and how fast customers will actually make the switch.
Past attempts by car companies to expand EV sales have largely flopped, saddling retailers with unsold inventory. Even now, some dealers say they are reluctant to stock too many EV models. Car companies have promised for years to make electric cars mainstream, but to date most have produced only low-volume, niche models.
Some shoppers are also unsure, citing a lack of public charging stations.
To solve problems like this, President Biden has said he wants to spend billions of dollars to upgrade the country’s charging infrastructure as part of a push to incentivize battery-powered cars. Ford, GM and other major car companies say they are confident in their new EV offerings and are training dealers to sell and service them. But it remains an uphill battle.
Volvo Cars CEO Håkan Samuelsson recently said that all future battery-electric vehicles would be sold exclusively online, and the price would be set centrally, eliminating haggling. Dealerships will still help deliver vehicles to customers and perform other services, like maintenance, he added.
GM recently dropped the sticker price of the all-electric Bolt and helped boost sales for the model in February. But demand remains relatively low.
After dealers figure out how to sell EVs, another problem awaits them in service bays. Service remains a big profit center for dealerships, and EVs typically have fewer mechanical parts and don’t require the same levels of service as gas-engine cars, such as oil changes.
Source: The Wall Street Journal