How car dealers are making the switch from gas to electric vehicles
Over the years, the automobile industry has relied on the car dealership system to sell their cars to the public. However, sales of electric vehicles (EV) are surging which has far-reaching consequences for car dealers, affecting every facet of their businesses.
There’s no question that Tesla has made EVs a practical option for many consumers, but the company has also been responsible for starting a new trend in selling cars: direct sales. And other EV companies such as Rivian and Lucid have replicated the Tesla sales model.
What does this “anti-dealership” trend mean for the future of car dealerships? Almost every major automaker is entering the EV market and is still planning to sell them through dealers. So, what is the best way for franchise dealerships to transition from gas-powered vehicles to Electric vehicles?
A complicated relationship exists between car makers and franchised dealers that is supported by state laws. Many states make it difficult or even illegal to bypass the dealers and sell vehicles directly to consumers. So, both parties have a vested interest in making the switch to electric work, it’s not going to be “business as usual”.
Most car dealers are not equipped to manage the transition from traditional cars to electric vehicles. EVs offer different technology, refueling and sales techniques. In order to sell electric cars, a significant amount of planning on the part of dealerships is needed.
Looking beyond the vehicle
What are some of the challenges and potential obstacles for car dealerships making the switch to electric vehicles:
- Inadequate charging infrastructure
- Risk of grid overload
- High-carbon grid profile
- Finite critical materials and rare earth minerals
- Smart, flexible charging options
- Battery monitoring, analytics, and recycling
- Smart energy management for effective EV load management
The technical aspects of EVs are unique which means specialized training is needed for service technicians. From battery diagnostics to software updates, dealerships must invest in the tools and training so that they can offer consumers quality service for the EVs.
In addition to their service departments, car dealers will invest in training programs to enhance the EV expertise of their sales staff.
Completing the transition with confidence
The automotive industry is embracing the transition to EVs by planning ahead. This includes developing a business strategy that shifts the car dealership operating model, inventory management and marketing.
They hire an accounting firm for car dealerships, with in-depth knowledge of the industry’s unique taxation and accounting requirements. GYL niche services are industry specific and include compliance auditing, inventory controls, dealership valuation studies, government tax incentives, amongst many others.