A car’s a car– but to some people, it’s so much more. My brother is one of those people.
For as long as I can remember, he’s been fascinated by the automotive industry, starting with Hot Wheels and graduating to shows like Top Gear and sports like F1 racing. You could probably show him an image of just about any car and he would know the make and model—and give you an opinion on the vehicle, too.
But, electric vehicles (EVs)? Forget it.
It’s not that he doesn’t care about the environment. He does; he was a biology major. But, he also cares about “the driving experience,” and in his mind, EVs are on a warpath to destroying just that (at least until affordable performance EVs become widely available).
Perhaps more interesting is the effect that Big Auto’s EV push will have on car dealers. Right now, numerous old industry carmakers have pledged to go all-in on electric vehicles. General Motors plans to spend $27 billion on EV models through 2025, and plans to solely sell EV by 2035. Ford is dropping $22 billion on EV and aims to have a 40 percent EV fleet by 2030.
Who will be most affected? That’s the real question. Thousands of franchise auto dealers across America will see big impacts.
For one, there will be less service revenue. EVs have way fewer parts than internal combustion engine vehicles and don’t require oil changes or transmission repairs. CNBC reports that the servicing of those vehicles make up 50 percent of a dealer’s gross profit.
There will also be a required, expensive green certification: Auto dealers will have to retrain their staff and upgrade their facilities for EVs, which could cost up to $300k.
Lastly, direct-to-consumer sales are expected to be majorly impacted. When you consider how Tesla, the current EV leader of the pack (and don’t get my brother started on Tesla), does all its sales online– while many dealers have websites, most rely on in-person sales to seal the deal.
And, of course, those petrol heads who love the smell of gasoline, the sound of an engine revving or sputtering to life, the little gasp it makes when you punch the accelerator. For now, they can rest easy: less than 3 percent of U.S. new car sales are currently electric vehicles. Only time will tell how they’ll fare in the future.