The company that controls KBB has interesting insights to share.
Cox Automotive may not be a very known company to some, but it is the holding that controls Kelley Blue Book, a major reference in car prices in the US. Dedicated to all things automotive, it performs studies every once in a while which give us interesting insights on future trends. Such as EV adoption from the perspective of dealers. Are they happy with the new electric cars? What are they missing from automakers? The answers are in the study “Evolution Of Mobility: The Path For Electric Vehicle Adoption.”
Besides dissecting how dealers see the EV invasion, the study also speaks about the consumer’s perspective on buying an electric car and, more importantly, the role Tesla has on EV adoption. We have divided these other subjects into specific articles you can read by clicking on the links above. Or below.
Interestingly, the study shows the perception of dealers and plain reality. As an example, they believe BEVs are only 5 percent of new cars sold every month, as well as 9 percent of CPO (certified pre-owned) vehicles and 4 percent of non-CPO cars sold in the same period.
When you listen to this presentation on the study, made by Rachelle Petusky, Research & Market Intelligence Manager for Cox Automotive, you get to know that only 3.5 percent of new vehicles sold in the US are BEVs. Plug-in hybrid vehicles represent another 3.5 percent. Unfortunately, Cox does not mention how many CPO and non-CPO vehicles are actually sold every month on average by dealers.
Most of them do not feel any pressure to sell more EVs – as Jaguar dealers with the I-Pace – which leads them to postpone strategies to do so. Only 9 percent of dealers feel a high urgency in selling EVs. And the ones that feel more pressure to do so are luxury car dealers.
Cox Automotive does not mention that, but this is clearly due to the fact that buyers of luxury cars are migrating to EVs thanks to the Model S. This is why the next Jaguar XJ will be purely electric, for example.
Another factor for EV sales not to be a priority among dealers is the fact that 54 percent of them believe they have a lower ROI (return over investment) on selling EVs than on selling ICE vehicles. You may think this is due to a need for incentives, but that is not all.
EVs demand much less servicing. They do not need oil changes or radiator fluid checking. They do not need engine inspections. Their brake pads and other components last much longer.
If you do not sell accessories for EVs, there is very little room for dealers to make a profit out of EV sales. Probably one of the reasons for Tesla not to have a single dealer, but rather service centers that do not have a showroom for new cars.
It is shocking to see 49 percent of dealers that were consulted by Cox Automotive also think they “are more likely to always sell” ICE cars. Like in “forever”, which gives us a precise picture of the ones that do not see it coming. At all.
These guys must be the same ones that do not see how they can sell more EVs because they don't think they have that much influence. While 64 percent believe they have a strong influence on an EV buying decision, 75 percent of customers believe they have such an impact.
As Tom Moloughney correctly pointed out when explaining why Jaguar sells so few I-Pace units in the US, buyers expect to have loads of information on EVs, such as which cost advantages they offer, where to charge, how to charge and how to better deal with them.
And here comes one complain dealers have against carmakers: they believe OEMs are not offering enough support for them to deal with EVs. They believe they lack training, marketing support materials, and consumer education.
The result is clear: dealers with the most support for EV sales sell 88 percent more than the ones that feel the automaker does not care to sell them at all. The fact is that mainstream car manufacturers are between a rock and a hard place in what relates to EVs.
If they stimulate these vehicles' sales, they will see billions of dollars spent on traditional car manufacturing go down the drain really soon. Some even build EVs as they build regular cars, such as Mercedes-Benz with the EQC or Hyundai with the Kona Electric, in order to save a few bucks. If they don’t secure a place among EV producers, they may be put out of business when EVs dominate the market.
When it comes to dealers, are they afraid that EVs may make their business go bust? Are they just not paying attention to the winds of change? Will it pay off to try to keep afloat in an environment that just does not seem to need their business model anymore? It is worth checking the whole study in our gallery. Or at the presentation video above. And sharing your thoughts about this with us.