Are Dealerships Killing Electric Cars?

MAY 25 2018 BY DOMENICK YONEY 66

What if we told you dealerships in the most EV-friendly parts of Europe are just as bad at selling plug-in cars as they are here?

Some Scandinavian countries are seen as electric vehicle paradises from our North American shores, are they not? This past March in Norway, for example, plug-ins accounted for an astounding 55 percent of new car sales. Heady headlines, however, may be papering over a more fundamental problem when it comes to selling these vehicles to the public. The issue? Dealerships.

Read Also: Why Dealerships Fail At Selling Electric Cars

It seem there, as here, salespeople are letting down their customers if they inquire about electric vehicles. As much as we’d like to believe this is not the case, there is proof. A study published in the journal Nature Energy, tracks the results from sending mystery shoppers on 126 visits to 82 dealerships in 15 cities spread over five countries — Denmark, Finland, Iceland, Norway and Sweden. It combined the data collected by their spies with other evidence from expert interviews, then analyzed the variance of experiences within the different countries. The results of all this were pretty interesting.

If you click on the chart of salesperson rankings for the five countries (right), you can see that Norway is clearly ahead of its close neighbors. This is, they say, because of that country’s superior incentives. In Denmark, which cut its subsidies last summer, resulting in an electric vehicle sales crash, customers were directed towards internal combustion cars because not are they more familiar and comfortable with selling this product, customers are typically more apt to buy them anyway.

All the countries involved, regardless of the amount of government support for EVs, still had issues with the sales experience. From the study’s conclusion:

Despite market differences, our mystery shopping and expert interview data show that dealers were dismissive of EVs, misinformed shoppers on vehicle specifications, omitted EVs from the sales conversation and strongly oriented customers towards ICEVs.

The study also talks about why this is potentially very bad for EVs. Sales, they say, have until now been driven by the early adopter types and is approaching the gap where it may either be picked up by the mainstream or possibly not. Yes, despite an electric future looking like a fait accompli, it contends there is still a danger in the transition faltering.

Nothing, it seems, can be taken for granted, and the authors have some suggestions about how to increase the uptake and improve customer experiences which they say suffers from perceived problems like  “...low profitability, lack of EV models on site, lack of knowledge and competence about EV specifications, and [the sense that] that EVs take longer to sell.”

It suggests improving tax structures by “explicitly address capital costs of EVs instead of costs of ownership,” as well as getting governments to “encourage car dealerships, through a potential standard or reward scheme, to revise sales commission and compensation structures to increase the willingness of dealerships and salespeople to engage with EV technology.”

There’s quite a bit more here, so if data and policy interests you, we suggest spending some quality time poring over the work.

Source: Nature

Categories: General, Sales

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66 Comments on "Are Dealerships Killing Electric Cars?"

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No dealership needed to buy a model 3…

Yeah it’s so much nicer getting stuck calling customer support wondering if your car is ever coming. And then in the case on my Tesla waiting an additional week after it arrives for a seat repair, and it wasn’t shipped with the trunk floor either, yeah that was sooo much better 🙄.

I think you are a Russian troll, I don’t believe you have a Tesla.

No, I honestly ordered my Model X in April 2016, and didn’t receive it until December 2016. It was due to the fact that I had ordered the 5-seater. I was told my car would be built around June or July of that year. When that didn’t happen, and I wasn’t receiving a straight answer I started calling once a month. My car finally went into production in November, arrived at my service center in December, Tesla wanted to replace the second row seat folding mechanism before delivery, and the five seater’s trunk floor was “still in development” so it wasn’t in the car. I didn’t get the trunk floor until April 2017. So yes, the sales experience was like being stuck calling customer support, and no I’ve never even been to Russia…

Like… Michael-Cohen-never-been-to-Russia, or honestly?

Honestly, I still am a fan of Tesla as a company, and would still buy products like the solar roof, and power wall. But also being a car enthusiast, my Model X will probably be a one off purchase.

Tesla should send all customer support queries overseas,problem is the hardware, you cannot send it over the internet ,I mean they don’t make the parts at call centers. LOL

I’m curious whether they sent some Mystery Shoppers in as “novices” and others as “experts” to see if they got treated differently. I imagine if you walked in and said “what’s this I hear about an electric car?,” they’d probably use different tactics and be more likely to try to dissuade you than if you came in saying “I’ve been reading up on the [ElectricCarModel], and I’d like to know more about setting up home charging options.”

At least in the US, one of the problems is the MASSIVE turnover rate in the car sales industry. That salesperson you talk to about a Bolt was probably selling Honda’s a few months ago. Many simply don’t know the cars they are selling any more than a well educated EV enthusiast. It is the sales people who are often “novices”.

Exactly.

Dealers sell what the company provides. If the companies were giving incentives, advertising support and providing EVs at decent prices, sales people would sell them.
The customer is already half sold to what they see on TV 15 times a day, each and every day.

Funny you should mention that, in ’99, my wife bought a Hyundai Elantra, during the process, her salesman said he’d much rather be selling for Porsche…

About a year later, bumped into him again…
Waiting tables at a TGIFriday’s.

It makes no difference!!!
When you have a plug in that is cheaper than the regular hybrid (Ionic in Cali) and you still direct your customer to buy the regular gasser then you are clearly biased! True story I witnessed this month.

Btw, that’s a $3000 msrp difference after rebates (fed, ca and edison). THREE THOUSAND DOLLARS!!!

The Mystery Shoppers went in as neutral shoppers and only for 10 minutes, so as not to waste people’s time. The expert interviews were held separately.

The link has more info on the way on the exact way the study was conducted. (there’s a helpful index on the right side of the page)

I heard years ago, that the state of car sales these days is that the majority of car shoppers now do most of their research online before even showing up at the dealership, so really, there aren’t many people who show up at a Nissan dealership and say “I’m looking for a car that’s reliable and good on gas” without already knowing what specific car they want.

Honestly, people are going to do a little googling when the second-biggest purchase of their lives is on the line.

Article question: “Are Dealerships Killing Electric Cars?”
———

Answer: No, it’s the other way around… electric cars are killing franchise dealerships.

The majority of independent franchise dealers are greatly resistant to making a transition to selling/servicing EVs because the operational & economical dynamics of selling/servicing EVs are much different than with ICE cars and especially on the service side offers much less profit opportunity… not much under the hood to maintain… brakes last the life of car… can purchase tires cheaper at Costco/Sam’s while grocery shopping… etc.

Hence the conundrum of traditional car makers transitioning to EVs while constrained to a tightly regulated legacy franchise dealership model.

The typical dealership experience is what people are sick of. Tesla does it completely different and it’s refreshing and what’s not to like other than waiting in line.

Lack of EVs is the only problem in Norway.

It’s true. Of course the Hyundai dealership won’t try to sell people on EVs when they can’t get hold of enough Ioniq to sell. That would be a gift to Nissan which is usually next door and stocked with LEAFs. Although right at the moment I think there’s a bit of a wait even for the latter. And given how superior the Ioniq is, I bet Hyundai could have sold a *lot* better than the LEAF had they wanted to. Its very high efficiency and very fast charging means it’s not much hampered by a small battery pack, and it is set to only get better for the very few very long trips as faster DCFC rolls out. But even today, the Ioniq with just 27 kWh has more range when it matters (in the cold, on highways) than the new LEAF with 39.5 kWh, and charges 80% faster in terms of added range per minute even before the LEAF begins to struggle with temperature! (To see this, realize that if car A consumes 33% less than B, B must charge 50% longer at the same power level to replenish the same range. Ioniq charges at near 50 kW all… Read more »

It actually seems like things are getting better here in the US, in that there seem to be more dealerships who have found success being a niche EV dealership that becomes a destination dealership for EV buyers. Now it seems like as an EV buyer you just need to figure out which dealerships to go to and which ones to avoid.

@Nix said: “there seem to be more dealerships who have found success being a niche EV dealership that becomes a destination dealership for EV buyers..”
————

That’s true. Those handful of dealers are often the result of management assigning EV sales to a single EV sales “specialist” (usually a junior sales person or the dealership owner’s tech savy son/daughter)… then that lucky EV sales person enthusiastically lifts high the EV flag to gain sales.

Agreed, when I first started looking at a plug-in 4 years ago or so, I received push back from almost every single dealership. I found a few Chevy and Nissan dealerships that actually would talk with me. The Toyota dealership I had bought my last car from went out of its way to convince me that electrics were going no where and that I didn’t want an electric.

Now the number of dealers in this area jumping on the Plug-in bandwagon is encouraging. Often there will be 2 or 3 EV specialists on the sales team and in the service centers.

But there are still plenty of completely clueless dealerships out there. They’d better adapt soon!

These stories sound good– but haven’t you heard of the internet? Research and buy the car online– show up to the dealer and collect your car. Or have it delivered, as I did recently from Pensacola FL to NM. Easy Peasy.

These complaints about the “dealer process” seem a little hollow when I can shop thousands of cars from my computer. I can buy from dealer stock via Ebay, so why all the “dealer wouldn’t sell me the car I knew I wanted” stories? There’s no prohibition I’m aware of that keeps me from selecting and buying a Volt or Leaf or BMW online. What am I missing?

How many people go out to purchase one of the most expensive purchases in their live with no knowledge of what they plan on purchasing? When I go to the dealership it’s to purchase a car I’ve already researched, know the cars and options they have on their lot.

Yeah… I already know car salesmen are useless, and I don’t care so much that they’re biased against EVs, because I’d never take their advice anyway. But I guess some people must (?) shop differently from us.

Or maybe it’s all just a relic of the pre-Internet era, when doing that research on your own was more difficult. Have you seen those Carvana ads? I’m not recommending Carvana, but man, they come down hard on the traditional sales model. And the sentiments they express have gotta be widespread — EVs aside. Maybe the whole traditional car dealership is about to go the way of so many other retail industries.

Yeah, why aren’t these guys just buying online? The last time I went into a dealer showroom was in the first Bush administration– I don’t understand these stories.
you can already bypass the dealer! Get a computer and DSL! Oh, you already have a computer and DSL? Guess what! You never have to go near a dealer…

You have to go a very long way back before the internet, or at least the web, was invented in order to get to a time when it was difficult to get information about cars. Not saying there’s not a big difference, but car magazines and car shows and consumer reports and mainstream media car reviews so on have been with us a long time.

How do you explain the people that buy the least reliable cars then? Of course not all of us know what we are doing. Go talk to a sale person, you will be shocked what stories they have.

Exactly, how is Chrysler still in business?
Because most people don’t read Consumer Reports.

No matter how you arrange things, somebody will necessarily buy the least reliable car. If a car launched and not a single person would buy it, what do you think would happen? It would be offered at a lower price, or with more equipment, or a better warranty. At some point it would be more reliable than many used cars that cost the same, and so even if reliability was the only thing that matters it would be rational to buy it!

In practice the least reliable cars are often expensive luxury vehicles. This is actually the case even for EVs, though I think that’s because Tesla is the only maker of luxury EVs (well, expensive – they’re not really that luxurious, more high-tech).

I have never experienced any BEV or EREV negativity from the GM dealers near me. Clueless sales people who want to send me to the “Volt expert”? Yes, that happens all the time. And then the clueless one frequently stands about 10 feet away and listens in, which I don’t mind at all. Dealerships are people and you can find what you look for. I went to Koons Tysons in Virginia and they wouldn’t bargain off their original price but they were cool otherwise and have been a great dealership for servicing my Volt. They even clued up and started charging my Volt when they finished rotating the tires! Thanks, Jimmy! 😉 I got my Volt at Criswell in Gaithersburg, MD and they were super cool, wish they were closer to my home. But they have a Volt expert, Mike Furman, who is their go to Volt guy. He is their top (?) Corvette specialist too, but his daily driver is a Volt. Very nice guy and his manager was super friendly and not pushy. I am in sales so I tend to identify sales techniques when they are used on me, and there were almost none used. I also… Read more »

“Clueless sales people who want to send me to the “Volt expert”? ”

They are actually trained to do that. GM started that whole program way back in 2011, where in order for a franchise dealership to get certified to sell Volts, they had to have a certain number of trained Volt sales and service employees. That was actually a strength of the Volt program. The downside was that because of huge turnover of sales people, it isn’t 100% effective.

Only in the US does it take years of training to be able to send a customer to the Volt expert! ROFL

when your business runs on servicing cars that need constant updates to that oily bits you don’t want that never ending source of revenue to stop, lol

If almost no sales techniques were used, he certainly is a clueless salesman! Sales is a big part of… ehem, sales.

My wife and I bought two EVs so far, one in 2013 and one just a couple of months ago. In both cases the experiences we had with various local dealers were simply awful. We expected going in that the sales people wouldn’t know thing one about EVs, which was sadly true. But we weren’t prepared for the level of misinformation we were served. Two different guys at Chevy dealers told me (when I never asked about it) that the Bolt doesn’t have electric seats because it makes more sense to save the electricity to drive the car. Both times I ignored the comment, but I was tempted to ask them how far you could drive a Bolt with the electrical energy needed to shift the driver’s seat six inches. Yes, two different dealers told us that a benefit of leasing/buying from them was free oil changes. No, I’m not kidding. One guy told us that because of regen braking you could stretch your mileage by driving on the highway with your left foot lightly on the brake pedal. Overall, the sales people made it very clear that they thought EVs were a cute, tree-hugger idea that would never be… Read more »

These same specimens of intellect spend anti-EV, anti-environment, and specifically anti-Tesla lobbying dollars to protect their opulent monopoly. At the state level, they tend to (in the US) be the #1 political contributors. I strongly support the Mitsubishi car sales guy who sells the Highlander PHEV here in town. I wish it was the #1-selling SUV for under $45,000.

However, InsideEVs is an echo chamber. As much as we talk to ourselves, the people we need to be talking to are the ones who would never consider an EV. Argue there. Talk to the gassers.

My personal experience was during an attempt to order an i3 from my local BMW dealer. The salesman (who had received the highest yelp ratings of any of their sales staff) explained to me that $50 of the “dealer prep fee” was to fill the i3 BEV with a full tank of gas. Oh yes, and another $50 or so was to pay for the license plate frame advertising their dealership.

It just never ends.

I think this is part of Chelsea Sexton’s complaint, that electric vehicles are the first cars to come along where manufacturers are relying only upon demand, “people don’t want them”. It’s what they do with lower profit margin product.

I’m not sure I even get why people complain about dealers. I’ve always loved cars enough, that their presence made zero difference.

Are Dealerships Killing Electric Cars?
Yes

I’d say the electrical vehicles are killing the dealerships.

And justifiably so, dealerships are hell. I’ve never once had a pleasant experience at a dealership and many people think the same. We now have cars (read: EVs) that have so little dependency on the dealership that they are all running scared and trying to hide them as much as possible. It is a case of self preservation (of the dealership) but you cannot stop progress.

I feel sorry for individuals who may lose their jobs but I do not feel sorry at all for the dealerships that will end up having to close up.

Sure. Of course the Teslarati folks tell a different story, don’t they?

https://teslamotorsclub.com/tmc/threads/long-wait-times-for-sc-to-get-parts-for-repair.111324/

Manufacturers need to do something about this. If the retailer isn’t going to represent their products fairly the manufacturer needs to cut off the bad retailers.

@CDspeed, the problem is they can’t. Auto franchise laws are so strong that the manufacturer cannot even discipline their dealers. The manufacturer cannot curtail or deny orders of their products.

Maybe they need to challenge the law then, they can certainly collect evidence of misrepresentation. Especially where electric cars are concerned. It still amazes me how easy it is to see the corruption, and it’s as easy as thinking of most other products. You can buy a smartphone through a retailer, or direct from the manufacturer from their own store. But car manufacturers can’t sell what they build without a middle man, that’s not right.

only in AMERICA, don’t you love the USA? lol

Question is silly. Electric car sales are increasingly at a breakneck pace.

Lol…we need to slow down.

Ok, then they *might* be slowing the growth. “Slowing growth” and “killing” are quite different things.

Ok, i’ll give you that one.

Sales are on an upward trajectory, but I would argue there lots of room for improvement.

Although we all love a good conspiracy theory, there could actually be another factor at work here. Good car salesmen know how to move metal, great car salesmen know how to read their customers and SELL the right car to the right buyer. There is a difference, which I’ll try to illustrate– There’s a video up on YouTube right now about “how to sell the Lotus Evora”. The Evora was a car the world loved, but few owners really loved– It was supposed to be a 911 killer, but no one who’d have considered a 911 actually bought one. Why? The Evora was like an Elise, but bigger and “more practical”– but… still a harsh ride, spartan interior, sketchy build quality, peaky engine, loud noise, and expensive to repair. What this guy points out, is the great Lotus salesmen figured out that “Only the hardcore were going to be happy with it and not be a pain, so it was better to soft sell it”. You’d quickly figure out who really wanted it and who it wasn’t the right car for. So, he’d start off pointing out all the downsides– and the people who the car was right for would… Read more »

Some good points, especially about making a lot of effort to those for whom an EV may be impractical now. There are still tons of others for whom it would be perfect, and so better to focus on those and get that metal moving.

I was genuinely amused by the “how to sell a Lotus” thing– but he was right. To find the “think different” people who would put up with the unique characteristics, you actually anti-sell. Make the prospect reinforce the “I’m on the vanguard here” perceptions.

The good salespeople may actually be doing it exactly right– the people that are right for an EV at the moment KNOW they are right for it. I bet most Bolt buyers walk into the Chevy dealer KNOWING they are going walk out with a sales contract in hand.

Wow, thanks for sharing this article link! Quite a study. And in the US the problem is likely far worse.

Legacy auto wants to continue to sell it’s ice cars for as long as they can. They would like to sell you a diesel too. It’s hardly a surprise that many dealerships have little inclination to promote electric vehicles, Less profit for them, less maintenance, cheaper to maintain. They don’t want that. They want to charge you $150 for a diagnostic, for then they can find all sorts of things wrong, and do scheduled maintenance, that if not followed to the letter, voids the warranty. So come on in for that oil change. VW has an ad trying to dump their diesels on You Tube. It says due to EPA regulations…these cars could not be sold, until fixed, and now they are, so make as an offer. [Don’t] Total B.S. VW lied, and cheated, the test, not the regulation itself. They are attempting to lay blame for something they did onto the very agency that is supposed to protect consumers and the quality of the air, from horrendous polluting diesels which VW makes, and continues to make Meanwhile Audi, Porche, are under investigation for the same thing, Also owned by the VW group This is vindication for Musk who said… Read more »

Excellent News for TESLA.
Tesla will Dominate GM, Ford and Chrysler, as the Dealership Model kills off the Big Three. Let the dealer decide what to sell on the lot means bankruptcy of the automaker and the dealerships.

Before I leased a BMW i3, I gave a GM dealer 2 shots at giving me a test drive in a Volt.

The faster electric vehicles sell, the less they have to be AVs. #EndTheStigma

Yes. Huge mistake to conflate the two. it’s tesla’s second largest mistake.

Yes, dealers are very hesitant to sell electric cars, they can even tolerate plugins, but not electric cars.

So for electric vehicles alone, automakers should be allowed to sell directly to customers.

It’s depressing to read articles about stuff one knows well, because it becomes so transparent just how much error and bad thinking gets published (and one of course realizes it must be the same with all the stuff one reads, but don’t know well, and therefore think is “informative”). First of all, it’s really disingenuous to treat Scandinavia as a unit in this context. Norway is in no way comparable to the other countries. And by the way, the are only two other Scandinavian countries: Sweden and Denmark. Finland and Iceland are not in Scandinavia; these two countries plus Scandinavia are the Nordics. But I guess people who refer to the US as America, when there are two Americas and each is a continent rather than a country, don’t really subscribe to the idea that being accurate matters. Second, the idea that car dealerships have huge influence over what car people buy is either bonkers, or just not applicable over here. Sales people do have influence – but so do the many car magazines, tests in mainstream media, and above all friends, family, colleagues and YouTube. Third, car dealers in Norway have a reason to steer people towards ICE that… Read more »

The dealerships have to die and have a RESURRECTION before the can get an erection. lol

Well this goes without saying.
Rule Number One in selling cars is “SWAT: Sell What’s Available Today” if it’s not on the lot, don’t acknowledge it’s existence. My experience at two local Hyundai dealerships points to this. When I went to buy a IONIQ BEV, one sales rep outright lied and said that Hyundai cancelled the BEV, and only offered the hybrids. The other denied any knowledge of its’ existence.

I have seen first hand how new car dealers deliberately prevent electric car sales, and even steer electric car customers towards their ICE cars. I always hoped that this was just limited to North America. Disappointing to see that this is also happening in Europe as well. This may be a universal, and natural tendency of new car dealers everywhere to reject the sale of more durable, low maintenance, low service requiring electric cars in favor of the obsolete technology ICE vehicles.

When I bought my Chevy Bolt from Carter Chevrolet in Connecticut, it was my worst car worst car purchasing experience. I learned that while the Bolt is the Chevrolet of the future, Chevrolet’s customer support represents the Chevrolet of the past.