Electric vehicles are the future of the American auto industry: if dealers know how to sell them

“The consumer in Central America is not there yet,” when it comes to switching to electric vehicles, he said, citing the long distances that many of its customers drive daily and the lack of off-road charging infrastructure. cities.

As car executives and investors worry about the upcoming era of the electric car, many dealers say they are struggling to square that enthusiasm with the current reality in new car sales lots, where last year vehicles with batteries accounted for less than 2% car sales in the US.

Most consumers who come to showrooms don’t buy electric cars, and with relatively low gasoline prices, even hybrid models can be hard to sell, dealers and industry analysts say.

Car manufacturers are moving aggressively to expand their range of electric vehicles with dozens of new models coming in the coming years. Some, like GM, set firm targets for when they plan to completely eliminate gas-powered vehicles.

Many dealers say this puts them in a tricky place – they try to adjust, but they don’t know if customers will make the change and how quickly they do it. About 180 GM dealers, or about 20%, have decided to give up their Cadillac franchises instead of investing in costly upgrades that GM has demanded to sell electric cars.

A GM spokesman said the company expected some Cadillac dealers not to participate and is pleased that the remaining 700 share their all-electric targets.

Past attempts by automakers to expand electric vehicle sales have largely failed and have plagued retailers with unsold inventory. Even now, some dealers say they are reluctant to store electrical models en masse.

“The biggest challenge is that dealers have a bit of‘ boy who cried the wolf ’syndrome,” said Massachusetts dealer Chris Lemley.

Car companies pledged for years to turn electric cars into currents, but only produced low-volume niche models, he said. Remember Ford Motor Co.

deploying an all-electric Focus that sold poorly and piled up in its batch. It was discontinued in 2018.

“So when we’re told,‘ This time, we really mean it, ’it’s easy to be skeptical,” Lemley added.

Some buyers are also unsure. Joe Daniel, an energy analyst at the Union of Concerned Scientists, said he was determined to buy an electric car, but eventually gave up his effort after realizing there weren’t enough public charging stations near his Washington apartment. DC Without a place to plug it in. the purchase made little sense, he added.

“For electric vehicles to take off, they have to be as comfortable as gas-powered cars, that’s the main point of this big purchase,” Daniel said.

To solve problems like this, President Biden has said he wants to spend billions of dollars on improving the country’s recharging infrastructure as part of a push to encourage battery-powered cars.

Ford, GM and other major car companies say they are confident in their new electric vehicle offerings and are training dealers to sell and service them.

Still, some car retailers say they worry about the long-term implications for their business.

Tesla Inc

The influence in the electric car market has created a new standard for vehicle buyers, offering an online transaction and a simplified line without price negotiation. Other electric vehicle startups, such as Rivian Automotive and Lucid Motors, say they will also sell directly to consumers and avoid traditional dealerships.

Some car companies now follow their lead, initially storing lots of dealerships with few or few electric models and allowing customers to order more directly from the manufacturer.

Volvo Cars CEO Håkan Samuelsson recently said that all future battery-powered electric vehicles would be sold exclusively online and that the price would be set centrally, eliminating the possibility of haggling. Dealers will help deliver vehicles to customers and perform other services, such as maintenance, he said.

“The market goes from the physical dealer to the network. That’s what will happen in the next ten years, ”Samuelsson said.

Howard Drake, a GM dealer in Los Angeles, said he is considering converting two of his showrooms. Instead of separating the models by brand, it is considering two stores: one for electric vehicles and the other for gas vehicles.

“They’re really different customers,” Drake said. “A Hummer EV buyer probably doesn’t want to be sitting next to some guy buying a gas truck.”

Sowers said he sees encouraging signs. GM recently lowered the price of the all-electric Bolt sticker and helped boost the model’s sales in February. But he said his electric vehicle inventory will remain light because he is unsure of long-term demand.

“It’s still very early days,” Sowers said.

As soon as dealers find out how to sell electric vehicles, another commercial problem awaits you in the service bay.

Electric vehicles tend to have fewer mechanical parts and do not require the same type of service that gas engine cars need, such as oil changes. This job right now is a big profit center for dealers.

“There will be an impact, but it can take three or four years to see the full effect,” Lemley said. “That’s really my main question that addresses all of this.”

—William Boston contributed to this article.

Write to Nora Naughton to [email protected]