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Guest column: A future dominated by EV sales closer than you think – Automotive News

by Nov 1, 2022Blog0 comments

By 2030, the number of electric vehicle models on dealership lots will balloon to 276, from 26 in 2021, according to S&P Global Mobility. This explosive growth will present dealers and consumers with exciting choices, but also new concerns.
Without the benefit of historical buying data, dealers could face repeated challenges in identifying the right consumers for new models. Similarly, consumers could find themselves grappling to make informed decisions as they compare new vehicles and contemplate a wide range of terms and capabilities.
To establish credibility with their current customer portfolio with regard to EV sales, dealers must understand the factors and trends driving EV purchases.
The U.S. crossed the EV tipping point for mass adoption in the first half of 2022 with 5 percent of new-vehicle sales being electric. This rising trend, combined with continued tax incentives and increasing government support for the development of charging infrastructure, is fueling the EV push by consumers and dealers.
A growing number of consumers are interested in exploring electric options and encouraging dealers to prepare for this transition. In fact, a 2022 industry study finds that 80 percent of buyers would consider purchasing an electric vehicle — an increase from just 50 percent in 2021.
S&P projects that by 2030 the average dealer will have a new-vehicle mix of 70 percent internal combustion engines and 30 percent EVs. As consumer interest in EVs grows, meeting the unique demands of these buyers will be important for dealers.
A joint study by S&P Global Mobility and TransUnion shows EV buyers have excellent credit profiles, but also a greater appetite to shop around for the best financing terms on digital platforms. The study also finds EV intenders are two times more likely to complete finance applications online vs. internal combustion vehicle intenders. This highlights the opportunity for dealers to integrate digital retailing tools onto their website to ensure they are transparent with consumers about their offers.
Online prequalifications at the start of the buying process are also helpful tools in capturing EV intenders. Not having this feature may exclude dealerships from a consumer’s consideration set.
With the projected pace of EV growth expected to vary by brand and market, the challenges and opportunities presented to dealers will differ. Success will be determined by how proactive dealers are in establishing a customer-centric approach.
Research shows today’s EV-only brands are lagging behind when it comes to a customer’s shopping experience — with a recent industry survey placing brands like Tesla, Lucid and Rivian at the bottom quarter of Pied Piper Prospect Satisfaction Index rankings.
Almost all customers start their shopping online, so it’s important that dealerships respond quickly to website leads and answer technical questions over the phone. Unlike brands such as Tesla, which have centralized ownership and control, the competitive advantage of franchised dealerships lies in their ability to deliver a supreme showroom experience that includes answering questions and providing test drives for customers who prefer an in-person environment.
Staying ahead of customer demands will be key as dealers transition to EV sales. But the complexities of maintaining both internal combustion and EV sales and service businesses present costly challenges for dealerships with disjointed operations. So dealers must take a targeted approach that incorporates every department to build EV credibility with their customers.
Customers debating the transition to an EV will have many questions. Ensuring dealership staff are well-equipped to answer their inquiries will create further opportunities to capture EV growth in each market.
Some dealers are scaling their approach by designating an “EV expert” on their team. This person answers questions and connects customers to valuable resources while helping them navigate and take advantage of all the federal, state, local and utility EV incentives available.
But it’s important that all dealership staff can confidently speak about EVs. This allows dealers to personalize their approach and build trust with potential buyers.
Reasons for EV adoption vary from person to person, making it critical that dealers take a data-driven approach in identifying and engaging potential and future EV customers. With the right marketing technology tools, dealers can assess the factors motivating a buyer’s decision to tailor sales team messaging.
If a customer is a homeowner, a salesperson will want to emphasize the convenience of in-home charging stations. If someone expresses frustration over frequent service visits, highlighting the increased reliability and longer service intervals of EVs vs. internal combustion vehicles could be what wins that customer over.
While the speed of EV sales and service growth will be dictated by market demand and automaker requirements, the challenges and opportunities offered to dealers will be largely the same. So to lead the charge in capturing future growth with a competitive edge that accelerates their return on investment, dealers must proactively embrace EV sales today.
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