Study Says Traditional Dealerships Not Prepared For Onslaught Of EVs

DEC 11 2017 BY MARK KANE 26

In its latest Electric Vehicle (EV) Sales Experience and Best Practice Study, Ipsos RDA finds that dealerships are often not prepared for electric vehicles.

Sell or not to sell?

We heard this story many times since plug-in sales kicked off in earnest in late 2010, and it seems that times have not changed that much over the past 7 years.

Ipsos RDA visited 141 dealerships, located in the hottest EV markets in the U.S., to realize that (on average) the customer experience in shopping for a plug-in car is far removed from the service one finds at a dedicated Tesla store network.

Some of the dealers were ready to promote and sell, but others were not, as there is an inconsistent experience within a single brand.

As one might expect, dealers that are not prepared for the plug-in movement aren’t equipped with the knowledge of electric vehicles, their inventory is limited, but are happy to still try to sell you an ICE vehicle – despite the consumer asking about its plug-in offerings.

“The lack of consistency in the EV shopping experience, even within the same brand, highlights the need for better product knowledge and support to effectively position electric vehicles with the U.S. automotive consumer” said Todd Markusic, VP, Research at Ipsos RDA.

Here is more of what Ipsos RDA found out:

Unprepared Staffs, Inconsistent Practices, and Limited EV Inventory and Information

Tesla sales staff, advantaged given their EV-only product line, exude a passion for electric vehicles and are equipped with the information needed to help consumers make informed decisions. This is not the case for traditional brand dealers who sell EV’s alongside other vehicles. The EV sales process, in many instances, has not been differentiated from the traditional and, in effect, is passive. The availability of inventory, as well as critical EV ownership information in-store (from the sales staff or marketing materials) and online, is concerning and leaves shoppers with unanswered questions.

Furthermore, the sales process experience at traditional brand dealerships is largely inconsistent. Consumers shopping for a specific EV model may have distinctly different experiences from one dealership to another in the same brand family — one well informed, educational and supportive, the other completely lacking. “The lack of consistency in the EV shopping experience, even within the same brand, highlights the need for better product knowledge and support to effectively position electric vehicles with the U.S. automotive consumer” said Todd Markusic, VP, Research at Ipsos RDA.

Ipsos RDA – Electric Vehicle (EV) Sales Experience and Best Practice Study

These core issues tend to result in dealers moving consumers toward other, non-EV, models they are more comfortable selling. One key issue revealed in these findings was the belief held by some dealers that the consumer must be prepared to compromise on their EV shopping experience expectations. This included expecting limited or no inventory to physical evaluate or select from. Rather than search for, or order, the desired vehicle, many shoppers are pressed to accept what is available — including hybrids or even gas-engine alternatives. “Attempting to switch a shopper away from their EV interest is not only damaging the likelihood of a potential sale, but it can damage the trust a consumer has with the dealership” added VanNieuwkuyk.

EVs Do Not Take Center Stage

Electric vehicles are not often seen on the showroom floor nor are marketing materials displayed or made available and many dealerships that sell these vehicles don’t have designated EV sales people to manage the various questions and concerns potential owners have. “This lack of support for the EV shopper lessens the likelihood that they will make the decision to go electric” said Markusic. “It is surprising that consumers often were not offered an EV test drive, a key experience that showcases the uniqueness of its performance benefits. Most of the time the consumer had to request one”.

According to Mike VanNieuwkuyk, SVP, Ipsos RDA said:

“Many OEMs have already introduced electric vehicles to their product lineups and there will be many more in the coming years. The results of this study can assist OEMs and dealerships in establishing an informative and supportive sales process focused on the unique elements of Electric Vehicle ownership.”

About the Study:

“RDA Automotive and the Ipsos Loyalty’s mystery shopping practice — the largest such practice in the world. The study was conducted in September and October of 2017. This mystery shop project covered 11 Electric Vehicle brands across the 10 largest EV markets in the U.S. Ipsos shopped the EV sales process — up to, but not including, the actual finance process. Mystery shoppers documented the shopping experience of 141 EV selling dealerships by completing a scorecard that includes up to 50 sales process attributes. A selection of the mystery shops was also videotaped, providing rich details on the consumer’s perspective of the EV shopping experience.”

source: Ipsos RDA –  Electric Vehicle (EV) Sales Experience and Best Practice Study

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26 Comments on "Study Says Traditional Dealerships Not Prepared For Onslaught Of EVs"

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In 1900, horse dealerships had similar challenges.

What you have here son is a “No Sh!t Sherlock” moment…

Question: Why would a dealership invest time and money to hype a product they can’t get in volume?

Answer: because they’re fiscally responsible

Question: Why is it different at Tesla?

Answer: Because their existence depends on it (they don’t have another product to sell)

Arrg,

Answer 1 should read: They won’t, because they’re being fiscally responsible

One mans “fiscally responsible” is another mans “short sighted”

Easily fixed once there are more than a handful of vehicles to sell.

Supply is a manufacturer problem, not the dealership’s fault.

By the time there are “more than a handful to sell” they will be bypassed by proactive companies.

Familiarity problems are just the symptom of how much less revenue a dealership faces from rotating to an EV, vs. ICE, client base?

Does the dealer network suffer more from lower service revenue, than the manufacturer suffers from higher input cost?

True! This weekend I walked into a Chrysler dealership that is jointly managed by the adjacent Nissan dealer with at least a dozen L2 EVSE on the same lot. None of their Pacifica Hybrids had been plugged in, and all were sitting at 1-2% State of Charge! I asked them to charge one up and made an appt for the next day, then had to delay the appt for 2.5 hrs because they still hadn’t charged any vans! After a test drive, the finance guy told me that there was no way Chrysler would credit the $7500 tax credit into a lease capital buydown, and made a number of factual errors on incentives, rebates, tax exemptions and credits. Needless to say, I walked.

Also – it is doubtful that Dealers, in General, read Websites Like this, or even mention it to the EV Salesperson to review!

It’s a wake-up call for many who assumed people like you and I were the customers.

All along, it has been the dealerships who the automakers must appeal to.

One issue is that folks wrongfully assume this is exclusive to EVs and if you were to buy an ICE vehicle, you’d have a PERFECT experience…If you show up wanting a Colorado they don’t have in stock, a good salesman will “steer” you to a Silverado that’s on the lot… I propose if another study is done, you have a “control” of someone on the same day attempt to purchase a Colorado for the baseline experience… In short, the guy just driving down to their local dealership to test drive a bunch of models is nearly a rarity…Something like 90% of everyone has performed some level of online research ahead of time…Inventories are listed online, you can see if the vehicle is in stock faster yourself then to call/show up to a dealership…Where the process needs to greatly improve is with the online experience…Multiple reports state only half of the dealership emails are answered…Most dealerships require a phone number to contact us, a lot of people use an obviously fake phone number and salesmen have admitted to ignoring leads with fake phone numbers…Then almost all their communication usually results in vague answers and a very aggressive “come on down and… Read more »

When I test-drove a Bolt (sales guy was very well-informed about EVs, BTW), I asked about dealerships not getting as much service revenue out of EVs. Answer was that dealerships have always had to scrounge for revenue streams, so they’d need to figure it out. Years ago, service wasn’t a big profit center; if it stops being one, they’ll have to come up with something else. But this sales guy was confident they would.

Sales staff wouldn’t have an idea of the service centers profitability…Service advisors often have no idea…

There really is a lot of money to be made with selling cars even at the mythical “invoice” price, all sorts of fees, undervaluing your trade in and selling you extended service contracts…

Many reports have stated that being able to buy cars below wholesale and sell them a little under retail is the most profitable aspect of a dealership…

Funny, because I recall listening to an NPR segment a month ago that basically confirmed the comments from the salesman. Dealerships are not swimming in money. I’m sure some do better than others, but idea that they’re making money hand over fist isn’t entirely accurate.

No surprise here. Ev’s are only a small percentage of their sales, and furthermore, many dealerships either do not sell EV’s currently nor have invested money for test equipment specific to them.

Some of the manufacturers have either no product available period – so I don’t see worrying about this.

Dealers will be prepared for EV’s when their host manufacturers start making them.

EV – only manufacturers seem to be having MORE trouble with service. Or coming up with the vehicles in the first place.

In a previous study it was mentioned several automakers actually charge a “certification fee”, which was $50K for either Ford or VW to even sell EVs…Not sure if that includes tech training but you’ll need at least one, better to have at least two, EV mechanics…

As always it depends … I’d agree that most are not, but clearly there are some who do.

I bought on a weekend a car from Kia and interestingly the rep admitted that EV’s are 30% of his sales already. Yet the same dealership bought up all available Stingers up here.

You can cater to both customers and you can do it well without hurding your bottom line. Proof is in the pudding …

Traditional auto dealerships are “not prepared” to sell PEVs in volume?

Heck, that’s hardly news. According to an overwhelming amount of evidence reported on this website, a sizable percentage — perhaps the majority — of traditional stealerships dealerships are actively resisting selling PEVs!

“EVs Do Not Take Center Stage”

I think we need a reality check here. Much as I’m a strong advocate for the EV revolution, at the same time we need to face reality. And the reality is that aside from Tesla, no auto maker outside China has any PEV that could be described as “best-selling”, by any stretch of the term. The best selling PEV was the Leaf, whose annual sales topped out at ~60,000 worldwide.

Models of cars with relatively small sales are not the cars that most dealerships are going to want to display in their showrooms! Not unless those are “halo cars”, and no auto maker other than Tesla (and perhaps BYD?) has a halo car that’s a PEV.

Reality check isn’t necessary. We already know there will be problems, but those are easy to address… once the vehicles are carried in inventory. This is how the “Prime” models will demonstrate a strong approach for penetrating dealerships. Much like the popularity growth of RAV4 hybrid, it will simply be a model available to choose from.

In other words, the dealer will have to do little to stock them and the salesperson little to promote them. It will just fit into the existing process… but also have a plug.

When I went on a test-drive of Prius Prime, it wasn’t charged. Go figure. That was no big deal though. No plug required. For the first part of the drive, we put it in CHARGE mode. That aggressively charges the battery-pack using the gas-engine (at a faster rate than you can pull from the grid, in fact, an 80% recharge in roughly 40 minutes). This allowed the return trip to the dealer to be entirely in EV mode.

From the article “don’t have designated EV sales people to manage the various questions and concerns potential owners have. “This lack of support for the EV shopper lessens the likelihood that they will make the decision to go electric”

I don’t understand this mindset…Outside of the automakers who offer a PHEV and BEV (Chevy with the volt and Bolt) where maybe a person isn’t sure if they want a Volt or Bolt, I just don’t see folks going to VW and unsure if they want an ICE Gulf or a eGulf (EV)…The decision to go PHEV/ICE was most likely made before the dealership…What questions or concerns does one expect the sales staff to answer?

It seems the study is wanting their EV offerings inside every show room, at least a quarter of the lot stocked with EVs and EV expert salesman who can apparently correct tell you the range and show you how to google the nearest charging station…A person who went to Chevy to buy a 4×4 Silverado isn’t going to “steered” into a Bolt just because it’s sitting on the showroom floor…

Here, here’s a feather. Knock me over with it.

The situation isn’t as dire as it seems. Of course, most dealerships aren’t experienced with EVs. But, in most major cities there’s a handful that are. It’s easy to find them by looking at their inventory on their website. Go to those, and your experience will be fine.

99% of Americans don’t care about the pollution coming out of their tailpipes.

(⌐■_■) Trollnonymous

true

Not having to go to a traditional stealership to haggle for a car like I am buying a camel somewhere in Africa just to get a fair price, is absolutely enough for me to give my cash to mr. Musk!

Just pay sticker price, no need to haggle. That is what you get at Tesla: sticker price.