How will Big Auto’s EV push affect car dealers?

An EV future means less services revenue for auto dealers (and upfront costs to become green certified).


June 15, 2021

You may have heard: Old industry carmakers are going all-in on electric vehicles (EV).

Per CNBC:

  • GM plans to spend $27B on EV models through 2025 (and wants to be all EV by 2035)
  • Ford is dropping a cool $22B on EVs and is aiming for a 40% plug-in fleet by 2030

Among the most-affected groups by this green auto shift:

Thousands of franchise auto dealers across America

Ford has ~3k while GM has ~4k… and these shops are bracing for a few huge changes:

  • Less service revenue: EVs have fewer parts than internal combustion engine (ICE) vehicles and don’t require oil changes or transmission repairs. Per CNBC, servicing of ICE cars makes up 50% of a dealer’s gross profit, which is a big hit.
  • Pricey green certification: Auto dealers will also have to retrain their staff and upgrade their facilities for EV sales. Costs to do so can run from $50k to $300k+.
  • D2C sales: EV leader Tesla does all sales online. And while auto dealers have websites, their core business remains the classic in-person question: “What brings you to our lot today?”

While <3% of US new car sales are currently EV…

… the shift away from oil is inevitable. A Bloomberg report projects EVs to account for 58% of all new global passenger vehicle sales by 2040.

Auto dealers are already adapting to the shift, with 2.3k Ford dealers in the US already plunking down $50k to be EV-certified.

But, really, nothing says inevitable like the frunk space in the Ford’s electric truck (F-150 Lightning)… that’s bottomless space for BBQ equipment.

Source: Repair Driven News / Ford

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