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GM and Ford are all-in to EV.This is how the dealer feels about it

On October 16, 2020, General Motors’ Detroit-Hamtramk Assembly unveiled a sign introducing the facility’s new name, Factory Zero, the Detroit-Hamtramk Assembly Center.

GM

The transition to electric vehicles is underway after many years of prediction that battery-powered sedans, pickups, and SUVs will replace gas-intensive, exhaust-generating models. Beyond the EV pioneer and market leader Tesla, Virtually all major car makers are lined up to switch electronic switches, which is not only a big problem for consumers, but also thousands of car dealers nationwide who need to embrace the future of electricity.

General Motors Said it was aiming Produce only EV by 2035By 2025, 30 new plug-in models had arrived, recording a $ 27 billion investment. FordPreviously invested $ 22 billion in EV development, just announced 40% of vehicles will be electrified By 2030. Toyota, Volkswagen, Daimler, Hyundai, Fiat Chrysler, Honda and other automakers have made similar promises.

US franchise car dealers, many of whom are long-time small businesses in suburban and rural communities, are preparing for the onslaught of this new model. Today, sales reps are preparing to put you on the EV. Also, because EVs have few moving parts, service technicians are trained to maintain them.

Mark Paradino, General Manager and 40-year veteran of Colonial Ford in Danbury, Connecticut, said:He was still excited Ford debut of F-150 Lightning pickup, An all-electric version of the country’s best-selling vehicle line for 40 years.

Ford F-150 Lightning “Beyond Expectations”

Paladin’s excitement is justified given that Ford.com aggregated 70,000 bookings in the first week of its official release on May 19, with $ 500 deposits plummeting in each, and Ford’s cross-vehicle. Marketing Manager Jason Mase reported. “Almost 70% of those customers are new to Ford, 90% ordered the highest trim levels and 80% ordered extended range batteries,” he reported. “It exceeded our expectations.”

Colonial is one of a total of about 3,000 Ford dealers and has volunteered to be EV certified. This is an investment that involves training sales and service personnel, upgrading battery charging stations, and purchasing special equipment, parts, and tools. The remaining one-third have so far opted out of spending nearly $ 50,000 on certification. Other manufacturers are demanding over $ 300,000 for designation.

“We joined everyone right away,” said Paradino, who said family-owned dealers had previously had several gas-electric hybrid models and Ford’s first EV, the 2021 Mustang Mach, launched in December. He added that he had been trained in ESUV. .. “We see EVs as part of our business and it will grow bigger and bigger. We want to be in that world.”

According to Credit Suisse, EVs make up less than 3% of total new car sales in the United States, with Tesla dominating the market, accounting for about 55%. However, although it has decreased from 72% a few months ago, it is a competition.

EVs are currently only a small part of the US car fleet, but “will eventually become an important part of the car retailer’s business,” said market research firm JD Power’s vice president of car retail. One Chris Sutton said.

Read more about CNBC Pro electric cars

A Bloomberg New Energy Finance Report By 2040, EVs are estimated to account for 58% of global passenger car sales, with China, Europe and the United States leading, respectively.

“We provide sales and service expertise and add value to automakers as an educational resource for our customers,” Sutton said of the dealer. He added that many other dealers remain in standby mode, as EV sales to date have been concentrated in coastal, Michigan, and Texas states.

Two-thirds of car consumers interested in EVs

In addition to the manufacturer’s ambitious goals, the Biden administration has proposed spending nearly $ 42 billion to build the country’s EV battery charging infrastructure, gas prices soaring, ExxonMobil shareholders We have elected three climate-friendly directors supported by the Activist Investment Group. board.Support for Biden’s Infrastructure Spending PlanHowever, it is unclear what the relationship is for EV infrastructure spending.

Car dealers are now focusing here.Then they Cars.com Survey This shows that two-thirds of Americans are interested in buying an EV. Despite barriers such as rising sticker prices More than a shortage of internal combustion engine (ICE) models and charging stations. In addition, some EVs are still eligible for a $ 7,500 federal tax credit, but states such as California, New Jersey, and New York offer additional rebates of up to $ 5,000.

These data help explain why the 17,000 members of the National Automobile Dealers Association (NADA) “can’t wait for EV products to arrive here.” “Why don’t they want to sell EVs when dealers are in the business of selling cars and making customers happy?” He dismissed reports of lack of enthusiasm among dealers. Said.

Political support for climate change policies varies from country to country, and over the past year, Republican support for the federal government has declined, making clean energy efforts a top priority. Recent survey Conducted by the Yale Program on Climate Change Communication and the George Mason Center for Climate Change Communication. However, there remains considerable support among conservatives to provide tax refunds to those who purchase energy-efficient vehicles and solar panels. 78% of moderate Republicans and 60% of conservative Republicans. This was the only “climate-friendly energy policy” in the survey, supported by a majority of registered voters, both moderate and conservative Republicans.

EV services are definitely evolving and will never be exactly the same. … no one needs to panic about it, but we know it will change over time, so we’re working with dealers.

Travis Hester, GM’s Chief Electric Vehicle Officer

However, one of the real concerns for dealers is the fact that EVs do not have to be borne by oil changes, transmission repairs, and other service owners of ICE vehicles on a daily basis. 50% Of the dealer’s gross profit. A 2019 Report from AlixPartners Dealers estimate that service and parts revenue will be reduced by $ 1,300 over the life of each EV they sell.

Although 70% of ICE vehicle aftermarket services are processed by independent shops, franchise dealers do not want to give EVs to them, especially as consumers are familiar with battery charging and other characteristics. “EV owners may trust dealers to perform services earlier than aftermarket shops,” Sutton said.

The service element doesn’t necessarily have to worry about Rita Case, CEO of Fort’s Rick Case Automotive Group. Lauderdale represents brands such as VW, Hyundai, Honda, Audi and Mazda at dealerships in South Florida and Atlanta. “EVs require maintenance of tires, brakes, batteries, lights, and steering and drivetrain,” she said. Rick Case Auto already sells and services a limited number of EVs and hybrids, but in anticipation of growing consumer demand for new electric vehicles, “within the last six months, with a sales representative. We strengthened EV training for technicians and bought a new charging device, “said the model, Case.

2024 GMC Hummer EV SUV and 2022 GMC Hummer EV Sport Utility Truck, or SUT.

GM

GM has prepared 4,100 franchise dealers over the past year, as well as a refreshed Chevrolet Bolt. Recent design — Not just the upcoming Electric GMC Hummer and Cadillac Lyric. Travis Hester, GM’s Chief Executive Officer for Electric Vehicles, said: “EV services will definitely evolve and will never be exactly the same,” he said, saying that some EV parts can last 10 to 15 years. “No one needs to panic about it, but we know it will change over time, so we’re working with dealers.”

Paradino, on the other hand, cannot keep up with Colonial Ford’s traditional service demands. “We book and service every vehicle possible,” he said. “Now I’m out for three weeks servicing your car.”

Threat of online car sales

Another issue in the dealer’s mind is the direct consumer (D2C) sale. This is the business model that has triggered Tesla to sell more than 385,000 EVs on US roads. Tesla operates about 130 company-owned showrooms, but sales are traded online. Finally, 33 states have allowed D2C car sales, and other parliaments have discussed legislation that bypasses the so-called franchise system that has legally linked dealers and manufacturers for over a century. NADA, state dealer groups and traditional automakers have advocated maintaining a franchise system, which they claim to level the competition.

Again, online marketing is nothing new to car makers and dealers. All brands maintain websites that allow shoppers to peruse models and prices, as well as custom design new cars. However, they are eventually referred to a local dealer and aim to complete the deal and establish a loyal relationship that includes regular maintenance, service, and perhaps future sales.

The proverbial “kicking the tire” routine that generates foot traffic is the lifeline of the dealer’s business model, so to survive it is a routine that extends only during the pandemic, for consumers who buy directly online. You need to adapt to your desires. That is, a mobile service technician who allows manufacturers to book and deposit online, special test drive events, onsite charging, and home phone calls, as Ford and other manufacturers do. “Dealer networks have been around for a long time because they can pivot where the market is, what customers expect and what they want,” Sutton said.

The automotive industry is at a turning point in the transition to EVs, and large and small dealers need to pivot again. “If you’re going to play in the EV sector, you have to embrace charging infrastructure, parts, equipment, workforce, etc. right now,” Paradino said.

The case is waiting for EV demand to grow, but is “very positive” for the future. “I work in the business of selling cars. One thing I know for sure is that people want cars.”

GM and Ford are all-in to EV.This is how the dealer feels about it

Source link GM and Ford are all-in to EV.This is how the dealer feels about it

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