Despite facing numerous evolving and ongoing challenges over the last few years, the automotive industry has kept its eyes on the future.
Since 2021, numerous automakers have made commitments to go all-electric to reach carbon neutrality. As a result, the number of available EV models in the US is expected to increase 10 times over, from 26 in 2021 to 276 in 2030, according to IHS Markit, now part of S&P Global.
With this momentous shift on the horizon, auto dealers need to balance serving today’s buyers and preparing their dealership for future electric vehicle sales, including training for their sales, service and F&I departments. Selling electric cars should not be all that different from normal car sales, but it is important to be prepared.
In this blog post, we’ll examine the three ways dealers of today can prepare to serve tomorrow’s EV buyers, including:
· Planning ahead, especially for infrastructure
· Training your team for the future
· Establishing credibility with these new kinds of customers
Plan Ahead, Especially for Dealership Infrastructure
To support future electric vehicle sales, dealers will need to make significant, costly updates to their lot, showroom and service bays including charging stations to cater to potential EV customers.
During a panel at NADA Show in 2022, Kristen Balasia, Vice President of Consulting Services at S&P Global Mobility (formerly known as IHS Markit), shared dealer-level investments to make the transition to EV sales will average $300K per dealer, two-thirds of which will go toward charging stations.
However, OEMs are establishing the prescriptive requirements based on sales opportunity for each dealer and while the cost of some of the updates may be high, they are straightforward and easy to plan for. OEM subsidies and investment funds from co-op programs can help ease this transition for many dealers.
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4 Ways for Dealers to Embrace an Electric Future
Transition is the key word – ICE sales won’t be replaced by EVs overnight and consumer adoption will be different region-to-region. This will ultimately dictate how fast dealers embrace electric vehicle sales, explained NADA Academy Director Michael Hayes during the same panel. “Every dealer, I truly believe, will sell EVs [and] wants to sell EVs, if that’s what our customers want.”
To ensure they’re evolving their dealership sales model at an appropriate pace, it’s important for dealers to listen to their customers, ensuring their inventory and offerings reflect their customers’ evolving buying preferences.
Train Your Team for the Future
While the transition from ICE to EV sales will be slower at some dealerships than others, it’s important every dealer recognizes the long-term importance of dealership training to develop EV expertise. OEMs will likely prioritize EV training requirements coinciding with vehicle launches, while also rolling out continuous learning opportunities, but this training isn’t just for dealership sales staff.
Before a customer makes the switch, they will undoubtedly have questions, even if they aren’t yet ready to buy an EV. It’s important every member of your team can speak confidently to these questions, even if that means connecting customers to relevant resources or other key team members.
Some dealers are scaling their approach by appointing a designated “EV Expert” – a highly knowledgeable member of the staff that can help buyers navigate and take advantage of all the federal, state, local and utility EV incentives available.
Establish Credibility with Current & Future EV Buyers
While the types of vehicles buyers are shopping for may be changing, the reasons they choose a dealership have remained largely the same.
In a 2021 industry study, 91% of car buyers said “trust” was important to them when deciding which dealership to purchase their new vehicle from, closely followed by pricing and the quality of the communications from the dealership.
When communicating with buyers about EVs, it’s important dealers establish credibility to build trust with buyers by personalizing their approach. “For example, if the EV buyer is a homeowner, a dealer might mention an in-home charging station,” said Chris Potgeiter, Product Marketing Manager for automotiveMastermind, when speaking at the previously mentioned panel.
“If the buyer is an apartment dweller, direct them to local charging stations near them,” Chris added. “Maybe the buyer has expressed frustration over being a frequent visitor to the service department. A dealer can point out that an EV has fewer moving parts that could break and can offer a new level of reliability.”
With consumers’ reasons for adoption varying from person-to-person, it’s important for dealers to take a data-driven approach to identifying and engaging potential and future EV customers. Using dealership marketing technology, dealers can assess the factors motivating a buyer’s purchase decisions to tailor their messaging. For example, including early trade-in offers, OEM incentives, tax credits or new electric models available for pre-order could be motivators to drive strategy.
While consumer adoption of EVs will differ from dealership-to-dealership, dictated by their region, OEM and local market, the automotive industry’s electric future is approaching – and gaining speed.