Car Dealers Are The Biggest Barrier To The Electric Car Revolution In The US
We get a ton of emails every week from PR people looking to convince us to write something nice about the companies they represent. In fact, many or our stories originate with those emails. Recently I got one such message from a press agent who wanted to inform me about how the electric car transition is imperiling car dealers in the US. It started with this title: “The $27K Tesla Shake-Up: A Dealer’s Inside Scoop on the EV Revolution.” When I opened the email, I was treated to this interesting information:
“The EV revolution was already off to a shaky start. Now Tesla’s announcement of a $27k electric vehicle is the spark that could ignite a seismic shift. This bold move doesn’t just signal a boon for eco-conscious consumers; it’s a strategic play that could disrupt the auto market’s status quo.
“As traditional manufacturers brace for impact, dealerships are at a crossroads. Dealers have been forced to invest heavily in electric vehicle inventory and infrastructure, leaving many with lots brimming with unsold cars. Meanwhile, Tesla’s competitive pricing strategy is poised to outmaneuver established manufacturers still grappling with the profitability of electric models.”
The message went on to say the chief operating officer of a large midwestern dealership group was available to speak with me about how his organization is “working hard to navigate and adapt to the EV market. If a dealer’s perspective on the EV transition fits into any of your content needs, let me set you up with [him. He] can chime in on how Tesla’s EV price drop and fluctuating EV market impact dealers. [He] is also available to discuss the auto market in general and the trends they are seeing across manufacturers for 2024.” [Note: identities deleted to protect the not so innocent.]
After wiping away the tears brought on by thinking about all those electric car sales that weren’t happening, I penned (typed, actually) this polite reply. I am still waiting for a response.
“Thank you, but I am going to pass. The first sentence of your email is highly inaccurate but perfectly captures the intransigence of traditional dealers when it comes to selling electric cars.
“I have a background in automotive sales and know that sales is the transfer of emotion. If dealers are not excited about selling electric cars, that attitude will filter down through the entire organization. Customers will sense that negative energy and decide not to buy an EV.
“Please feel free to share that insight with [him]. I am available to conduct in person sales training for his staff if he is serious about learning how to market electric cars. My fee is $10,000 per session plus travel and expenses. Please let me know if [he] is interested in my offer.”
Selling An Electric Car Is Different
My wife says I am a certified PIA and she is not wrong. But I get riled up when I hear how dealers are actively, knowingly, and intentionally setting out to thwart the advance of the electric car revolution. The Washington Post did a story about car dealers and electric cars on November 9, 2023. It said, “Many U.S. buyers say car dealerships, which sell the majority of new vehicles, are not prepared for the electric transition.” Several people told the Post the sales staff at many dealerships are poorly trained and know less about how an electric car works than the customer does. So why do we need dealers?
An electric car is different. Customers need to be educated about those differences, but most car sales representatives don’t have time to be educators. Selling a conventional car typically takes about 45 minutes. Selling an electric car can take hours because EVs are relatively new technology, which means customers have lots of questions. Usually what they want to know about most is how to charge it. They are afraid they will be stuck somewhere in East Overshoe with a dead battery. Many sales people play on that fear to switch people into a conventional car.
In a survey conducted in 2022, the Sierra Club found 66 percent of dealerships did not have an EV available for sale. 45 percent of those dealers said they wouldn’t offer an EV even if they could. Ford and General Motors have been working hard to prepare their dealers to sell EVs, yet many of those dealers have told the manufacturers they have no interest in taking part in the electric car transition. Many GM dealers have elected to take a buyout from the company rather than make the switch. Some Ford dealers are suing to prevent its electric car mandates from taking effect.
The Electric Car At The NADA Convention
In June, Slate sent a reporter to the NADA convention in Dallas. There he found lots of dealers lurching from open bar to open bar, but very few at the seminars where the nuts and bolts of how an electric car works and how to fill out the forms customers need to complete in order to claim their federal EV tax credit were explained.
At one point, a semi-inebriated person sidled up to the reporter and said, “This stuff is crazy, what they’re saying. It’s crazy. Claiming 10% of the fleet will be electric by 2030? Never gonna happen. Do you sell EVs? They’re toys, They’re not cars. And there’s nothing clean about clean energy — we know that. Ask any Tesla owner if they have a second car, and if it’s a Tesla. Ask what they take on road trips.”
He also spoke of Ford dealers who, rather than meet the company’s electric car requirements, have decided to give up selling Fords completely. “I can get you in touch with plenty of dealers who feel that way,” he said.
The Takeaway
Every sales professional knows you have to believe passionately in your product to be successful. It is clear that many of America’s car dealers do not believe in the electric car transition. That is an attitude that gets passed down to managers and sales staff. “Your attitude determines your altitude” is a poster one sees frequently in a sales environment. With such a negative attitude, it is little wonder electric car sales are struggling to get off the ground.
According to Slate, car dealers are among the wealthiest Americans. Some of the top dealership groups do more than $100 billion in business every year. In some cases, that’s more than the companies that manufacture the cars earn. The majority of their profits come from their service and parts departments. An electric car typically needs much less fixing than a conventional car, which means dealers could see their bulging wallets get quite a bit thinner in coming years.
It’s that threat to their income that has them worried. It’s human nature to want to hang onto the goose that laid the golden egg as long as possible. Those worries are leading dealers to try anything they can think of to slow the electric car juggernaut headed their way.
Under normal circumstances, we could understand such behavior even though we might not approve of it. But these are not normal circumstances. The world is rushing headlong toward a climate catastrophe brought on in part by the detritus that spews out of the tail pipes of vehicles powered by internal combustion engines. We do not have the luxury of waiting decades to make the transition away from conventional cars and trucks.
Many car dealers are putting their greed ahead of the need for a sustainable planet. It’s hard to understand why such antisocial behavior should be so handsomely rewarded.
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