Electric cars are the future of the U.S. auto industry - if dealers can figure out how to sell them

Electric cars are the future of the U.S. auto industry – if dealers can figure out how to sell them

Auto dealer Brad Sawers is spending money to prepare for the next wave of new electric models from General Motors, and he’s installing charging stations, upgrading service spaces and retraining staff at his dealership in the St. Louis area to deal with tech-laden vehicles.

But when he thinks about how many additional Chevy Bolts components he sold last year – nine of the roughly 4,000 Chevrolets sold at his Missouri dealerships – he makes it stop.

“The consumer in Central America isn’t there yet,” when it comes to switching to electric cars, he said, citing the long distances that many of his customers drive daily and Lack of cargo infrastructure Outside of major cities.

As auto executives and investors A buzz about the upcoming era of the electric carMany dealers say they struggle to match that enthusiasm with reality today in a lot of new car sales, with battery-powered cars last year accounting for less than 2% of US auto sales.

Dealers and industry analysts say most consumers who come to the showrooms don’t shop for electric cars, and with petrol prices relatively low, hybrid models can be a tough sell.

Automakers are moving aggressively to expand their electric vehicle offerings with the dozens of new models set to arrive in the coming years. Some put it like GM Steady targets when they plan to phase out gas-powered vehicles Completely.

Sales consultant Robert Mason Jr., center, spoke with Paul Sweeney, left, and his son Geoff, who were buying a Chevrolet Trail Boss at a Jim Butler Chevrolet in Fenton, Missouri, on Friday.

Many dealers say this puts them in a delicate place: They try to adapt, but aren’t sure whether customers will switch quickly and how fast. About 180 GM dealers, or nearly 20%, have them I decided to give up the Cadillac franchises Instead of investing in expensive upgrades that GM ordered to sell electric cars.

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A GM spokesman said the company had expected some Cadillac dealers not to be accepted and was pleased that the nearly 700 remaining would share its fully electric targets.

Previous attempts by auto companies to expand electric vehicle sales largely failed, flooding retailers with unsold inventory. Even now, some dealers say they are reluctant to stock up on electric models en masse.

“The biggest challenge is that dealers have the ‘Boy Who Cried Wolf’ syndrome,” said Chris Limley, a Massachusetts trader.

He said that auto companies had promised years ago to make electric cars mainstream, but that they had only produced limited-sized, specialized models. Remember

Ford Motor a company

He put up an all-electric focus that was badly sold and piled up on his plot. It was discontinued in 2018.

“So when we are told, ‘This time, we really mean it,’ it is easy to be skeptical,” added Mr. Limley.

Also, some shoppers are unsure. Joe Daniel, an energy analyst at the Union of Concerned Scientists, said he was determined to buy an electric car, but eventually gave up on his efforts after realizing that there were not enough public charging stations near his Washington, D.C. apartment with no place to plug in. The purchase did not make sense. he added.

“For electric vehicles to take off, they have to be as comfortable as gas-powered cars – and that’s the whole point of this big purchase,” said Mr. Daniel.

Long wait times at charging stations are gone: China’s emerging electric vehicle NIO is a leader in battery swap systems, and is challenging Tesla and other rival car manufacturers. Here’s how NIO and Tesla race for the world’s largest electric vehicle market in China. Photo illustration: Sharon Shi

To solve problems like these, President Biden has said he wants to spend billions of dollars to modernize the nation’s shipping infrastructure as part of the Pressure to stimulate battery-powered cars.

Ford, General Motors and other major auto companies say they are confident in their new electric vehicle offerings and are training dealers to sell and service them.

However, some auto retailers say they are concerned about the long-term effects of their business.

Tesla a company

The impact on the electric vehicle market has created a new standard for auto shoppers, offering online transaction and a streamlined assortment without negotiating prices. Other EV startups, such as Rivian Automotive and Lucid Motors, are saying they will likewise sell directly to consumers and bypass traditional dealerships.

Some auto companies are now following the example, initially stocking a lot of dealerships with few, if any, electric models, and letting customers order more directly from the manufacturer.

Volvo Cars CEO Håkan Samuelsson recently said that the future is all Exclusively battery electric cars will be sold online The price will be determined centrally, eliminating bargaining power. He said the dealerships would help deliver vehicles to customers and perform other services, such as maintenance.

“The market is moving from physical selling to the Internet. This is what will happen in the next 10 years,” said Mr. Samuelson.

Howard Drake, a General Motors dealer in Los Angeles, said he is considering converting two of his showrooms. Instead of separating models by brand, he is considering having two stores – one for electric and one for gas cars.

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“These are really different agents,” said Mr. Drake. “Maybe no Hummer EV buyer wants to sit next to someone buying a heavy fuel pickup.”

Mr. Sawers said he was seeing encouraging signs. General Motors recently dropped the price for an all-electric Bolt sticker and helped drive sales of the model in February. But he said his electric car The stock will remain light Because he is not sure about the long-term demand.

“It’s still very early days,” said Mr. Sowers.

Once dealers figure out how to sell electric vehicles, another business problem awaits them in the service room.

Troy Carrico worked on a Chevrolet Corvette.

Electric cars usually have fewer mechanical parts and do not require the same type of service as gas-engine cars, such as an oil change. This business is now a big profit center for agents.

“There will be an impact, but it may take three or four years to see the full effect,” Mr. Limley said. “This is really the biggest question mark heading into all of this.”

Write to Nora Naughton at [email protected]

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