Car 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 retraining employees at his dealership in the St. Louis area to handle with vehicles full of technology.
But when he considers how many plug-in Chevy Bolts he sold last year – nine out of the nearly 4,000 Chevrolets sold at his Missouri dealerships – it makes him hesitate.
“Consumers in the middle of America are not there yet,” when it comes to switching to electric vehicles, he said, citing the long distances that many of his customers drive daily and the lack of charging infrastructure outside major cities.
While automotive executives and investors are excited about the coming electric car era, many dealers say they are struggling to reconcile that enthusiasm with today’s reality in new car sales lots, where last year battery-powered vehicles accounted for less than 2% of US auto sales.
Most consumers who come to showrooms are not buying electric cars and, with gasoline prices relatively low, even hybrid models can be difficult to sell, say retailers and industry analysts.
Automakers are taking aggressive steps to expand their electric vehicle 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 completely eliminate gasoline-powered cars.
Sales consultant Robert Mason Jr., center, spoke with Paul Sweeney, on the left, and his son, Jeff, who was buying a Chevrolet Trail Boss at Jim Butler Chevrolet in Fenton, Missouri, on Friday.
Many resellers say this puts them in a delicate position: they are trying to adjust, but they are not sure if and how quickly customers will actually make the change. About 180 GM dealers, or about 20%, decided to give up their Cadillac franchises instead of investing in the expensive upgrades that GM required to sell electric cars.
A GM spokesman said the company expects some Cadillac dealers to give up and is pleased that the remaining 700 or so share its all-electric goals.
Previous attempts by automakers to expand sales of electric cars have failed, overwhelming retailers with unsold inventory. Even now, some dealers say they are reluctant to stock up on mass electric models.
“The biggest challenge is that drug dealers have a bit of the ‘boy who screamed the wolf’ syndrome,” said Massachusetts drug dealer Chris Lemley.
Automakers have vowed for years to make electric cars popular, but have produced only low-volume niche models, he said. He remembers Ford Motor Co.
launching a fully electric Focus that sold poorly and accumulated in its lot. It was discontinued in 2018.
“So when they say to us, ‘This time, we really mean it,’ it’s easy to be skeptical,” added Lemley.
Some buyers are also unsure. Joe Daniel, an energy analyst at Union of Concerned Scientists, said he was determined to buy an electric car, but ended up abandoning his effort when he realized that there were not enough public charging stations near his Washington, DC apartment. in, the purchase made little sense, he added.
“For EVs to take off, they need to be as convenient as gasoline-powered cars – that is the goal of this big purchase,” said Daniel.
Long waits at charging stations are long gone: Chinese electric vehicle startup NIO is a pioneer in battery exchange systems, challenging Tesla and other rival car makers. See how NIO and Tesla are competing for the world’s largest EV market in China. Photo illustration: Sharon Shi
To solve problems like this, President Biden said he wants to spend billions of dollars to upgrade the country’s charging infrastructure as part of an effort to encourage battery-powered cars.
Ford, GM and other major automakers say they are confident in their electric vehicle offerings and are training dealers to sell and serve them.
Still, some auto retailers say they are concerned about the long-term implications for their businesses.
Tesla Inc.’s
The influence in the electric car market has created a new standard for car buyers, offering an online transaction and a simplified schedule without price negotiation. Other electric vehicle startups, like Rivian Automotive and Lucid Motors, say they will also sell directly to consumers and bypass traditional dealerships.
Some automakers are now following his example, initially stocking lots from the dealership with few or no electrical models and allowing customers to place orders more directly from the manufacturer.
Volvo Cars CEO Håkan Samuelsson said recently that all future battery-powered electric vehicles would be sold exclusively online and the price would be set centrally, eliminating the possibility of bargaining. Dealers will help deliver vehicles to customers and perform other services, such as maintenance, he said.
“The market is changing from a physical to an online dealership. This is what will happen in the next 10 years, ”said Samuelsson.
Howard Drake, a GM dealer in Los Angeles, said he is considering converting two of his showrooms. Instead of separating models by brand, he is considering two stores – one for electrical products and the other for gas-powered vehicles.
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“These are really different customers,” said Drake. “A Hummer EV buyer probably doesn’t want to sit next to a guy buying a gas-devouring truck.”
Sowers said he sees encouraging signs. GM recently lowered the price tag for the all-electric Bolt and helped boost sales of the model in February. But he said his stock of electric vehicles will remain low because he is unsure about long-term demand.
“It’s still too early,” said Sowers.
As soon as dealers find out how to sell EVs, another business problem awaits them in the service area.
Troy Carrico worked on a Chevrolet Corvette.
Electric vehicles typically have fewer mechanical parts and do not require the same type of service that gas powered cars do, such as oil changes. This job is now a major profit center for dealerships.
“There will be an impact, but it can take three or four years to see the full effect,” said Lemley. “This is 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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