Auto dealer Brad Sowers is spending money to prepare for the next wave of new electric models from General Motors Co. He is installing charging stations, upgrading service bays, and training staff at his St. Louis area dealership to drive. vehicles full of technology.
But when you consider how many plug-in Chevy Bolts it sold last year – nine of the nearly 4,000 Chevrolet sold at its Missouri dealerships – it pauses.
“The consumer in the central United States is not there yet” when it comes to switching to electric vehicles, he said, citing the long distances many of his customers drive daily and the lack of charging infrastructure outside of major cities.
As car executives and investors talk about the coming age of the electric car, many dealers say they are struggling to square that enthusiasm with the current reality in new car sales lots, where battery-powered vehicles represented last year. less than 2% of sales. Car sales in the US
Most consumers coming to showrooms aren’t buying electric cars, and with gas prices relatively low, even hybrid models can be difficult to sell, dealers and industry analysts say.
Automakers are moving aggressively to expand their electric vehicle offerings with dozens of new models arriving in the coming years. Some like GM are setting firm targets for when they plan to phase out gasoline cars altogether.
Many distributors say that puts them in a tough spot – they’re trying to adapt, but they’re not sure if and how quickly customers will actually make the switch. About 180 GM dealerships, or roughly 20%, have decided to give up their Cadillac franchises instead of investing in expensive upgrades that GM has required to sell electric cars.
A GM spokesperson said the company expected some Cadillac dealers to opt out and is pleased that the remaining 700 or so share its all-electric goals.
Previous attempts by auto companies to expand electric car sales have largely failed, leaving retailers with unsold inventory. Even now, some dealers say they are reluctant to stock electric models in droves.
“The biggest challenge is that merchants have a bit of the ‘crying wolf boy’ syndrome,” said Massachusetts merchant Chris Lemley.
Auto companies have for years promised to make electric cars mainstream, but they only produce low-volume niche models, he said. Remember Ford Motor Co.
releasing an all-electric Focus that sold poorly and piled up on their lot. It was discontinued in 2018.
“So when they say, ‘This time, we mean it,’ it’s easy to be skeptical,” Lemley added.
Some buyers are not sure either. Joe Daniel, an energy analyst with the Union of Concerned Scientists, said he was determined to buy an electric car, but eventually gave up on his endeavor after realizing there weren’t enough public charging stations near his apartment in Washington, DC. Without a place to plug in, the purchase made little sense, he added.
“For electric vehicles to take off, they have to be as convenient as gasoline cars, that’s the goal of this big purchase,” said Daniel.
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 repair them.
Still, some auto retailers say they are concerned about the long-term implications for their business.
The influence in the electric car market has created a new standard for car buyers, offering an online transaction and a simplified line without price negotiation. Other EV startups, such as Rivian Automotive and Lucid Motors, say they will also sell directly to consumers and avoid traditional dealerships.
Some auto companies are now following suit, initially stocking dealer lots with few or no electric models and allowing customers to order more directly from the manufacturer.
Volvo Cars CEO Håkan Samuelsson recently said that all future battery electric vehicles would be sold exclusively online and that the price would be set centrally, eliminating the possibility of haggling. The dealerships will help deliver vehicles to customers and perform other services, such as maintenance, he said.
“The market is moving from the physical dealership to the online one. That’s what will happen in the next 10 years, ”Samuelsson said.
Howard Drake, a GM dealer in Los Angeles, said it is considering converting two of its showrooms. Instead of separating the models by brand, you’re considering two stores: one for electric vehicles and one for gasoline vehicles.
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“These are really different customers,” Drake said. “A Hummer EV buyer probably doesn’t want to be sitting next to a guy buying a gas-guzzling pickup truck.”
Sowers said he sees encouraging signs. GM recently lowered the tag price of the all-electric Bolt and helped boost sales of the model in February. But he said his EV inventory will remain low because he’s unsure of long-term demand.
“It’s still too early,” Sowers said.
As soon as dealers find out how to sell electric vehicles, another business problem awaits in the service bay.
Electric vehicles typically have fewer mechanical parts and do not require the same type of service that gasoline-powered cars do, such as oil changes. That job right now is a huge profit center for dealerships.
“There will be an impact, but it may take three or four years to see the full effect,” Lemley said. “That’s really my biggest question mark in all of this.”
—William Boston contributed to this article.
Write to Nora Naughton at [email protected]
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