electric vehicles oem and car dealers

Slashing Misconceptions About Electric Vehicles: The Relationship Between Car Dealers and Manufacturers

by Nicolette Emmino

When it comes to setting the stage for the nearly 100 new electrified car models that are scheduled to arrive in the U.S. over the next few years, car dealers and manufacturers are in the driver’s seat. In order to make this work and clear up common misconceptions associated with EVs, overall, both groups must strive for enhanced collaboration.

A new study, the Cox Automotive Evolution of Mobility: The Path to Electric Vehicle Adoption, revealed this fact, and more about the gaps between consumers’ and dealers’ barriers and expectations with current EV realities in the U.S.

For the study, Cox Automotive surveyed 2,503 consumers – divided into EV Owners, EV Considerers and EV Non-Considerers – as well as 308 franchised dealers. It also examined EV shoppers’ dealership experiences during their purchase journey and the key support areas dealers need from OEMs to increase EV sales.

What are the leading barriers to EV adoption among Non-Considerers? Eighty-three percent cited battery life and charging anxiety, and 70% cited costs.  While these factors have continued to test consumers’ and the industry’s acceptance of electric vehicles, the study sheds a positive light on an electrified future with the right education and technology in place.

According to Lea Malloy, associate vice president, emerging technology, Cox Automotive Mobility Group, this is actually a good thing because it affirms the importance of consumer education, something that can be improved.

“Consumers see benefits in an electrified future but still need more assurance from dealers and automakers surrounding EV ownership. Collectively, dealers and automakers can deliver the confidence needed to advance EV adoption,” says Malloy.

EV Affordability: Not Too Bad

Despite the fact that 77% of Considerers and 87% of Non-Considerers view initial costs for EVs as “somewhat or much more” than internal combustion engine vehicles, the price gap between EVs and gas-powered vehicles is closer than most realize and continues to tighten. In tracking average transaction price, EV pricing has only minimally increased in the last seven years while pricing for new internal combustion engine vehicles has spiked almost 19%. EVs could become even more attractive and affordable with the application of new rebates and other EV-focused purchasing incentives.

In terms of the total cost of operation, almost all EV Considerers (98%) believe it is less expensive to own an EV, with 65% thinking there are cost savings to fuel/charging and 54% thinking there are cost savings to maintenance. In fact, according to Kelley Blue Book, average 5-Year Cost-to-Own savings is significant for some EVs versus their gas-powered counterparts – 58% overall, with 60% in fuel savings and 25% in service cost savings over five years.

Apart from market leader Tesla, EV awareness remains low for most automakers today. According to the study, Tesla’s awareness at 81% nearly doubled every other manufacturer – Toyota at 52%, Chevrolet at 47%, Nissan at 42%, and Honda at 39%. However, according to Cox Automotive, consumer awareness and consideration are likely to rise with more inventory, more variety, and affordability coming to the EV category in the next several years. With these new models, consumers are also hoping for more performance and technology, particularly around autonomous and safety features.

Fears: Battery Life and Replacement

In addition to concern over the initial cost of purchasing an EV, consumers also worry about battery life and the costs associated with battery replacement. Fifty percent of EV considerers see the average battery life at 100,000 miles or more, and 46% thought average battery life was 65,000 miles or less. According to Consumer Reports, the expected lifespan of an ICE powertrain is about 200,000 miles.

In order to provide assurance over battery lifespan and replacement cost concerns, the U.S. government instituted a mandate for OEMs to offer a minimum of an 8-Year/100,000-mile warranty on batteries. Some manufacturers are offering even more protection, such as the lifetime battery warranty on the Hyundai Kona EV. But, even with these affirmations, more than half (52%) of EV owners still elected to purchase the extended warranty for their battery, providing them with even more peace of mind. Much of this risk will likely soften with the advancements in battery technology and manufacturing. In fact, the cost of Lithium-ion automotive batteries has decreased by 77% since 2010 and another 45% decrease is anticipated by 2021. These are eventual cost savings that will benefit dealers, OEMs and EV shoppers.

Priority: Charging/Range

Range remains a top concern of Considerers, who expect a range of about 240 miles but ultimately are looking for a range of 300 miles, which is more in line with current gas-powered vehicles. With most current and future EVs meeting or exceeding consumer expectations, range should become less of a deterrent.

The bigger challenge facing the industry is the delivery of a sufficient public and private charging infrastructure. There is a need for more charging stations with 68% of EV owners citing a need for more charging availability around their home and 63% asking for more around their offices. Consumers also want to multi-task while they charge away from their home or workplace. In line with today’s on-demand economy, EV shoppers showed interest in future battery charging services, with Owners and Considerers responding favorably to mobile (77% and 83%, respectively) and robotic (74% and 76%, respectively) battery charging services.

Better Dealer and OEM Alignment = More EV Sales

While dealers surveyed agree with consumers on the primary barriers of EV adoption – vehicle costs, battery life and charging infrastructure – dealers also pointed to several operational challenges that make it more difficult to sell EVs. Fifty-five percent of dealers surveyed reported a lack of inventory – both availability and number of models, and half of the dealers said there are not enough public charging stations.

EV sales only represent less than 3% of total new-vehicle retail sales volumes in the U.S., according to IHS, and dealers are not selling many EVs today. They lack the enthusiasm that can be attributed, in part, to the perception of lower profits for EVs with 54% of dealers seeing lower ROI for sales of EVs compared to gasoline-powered vehicles. In addition, one-third of dealers pointed to the lack of OEM sales and marketing support and poor sales training as a challenge.

Among dealers who are receiving support, only one-third of them find it helpful. Additionally, only nine percent of dealers feel OEMs are exerting pressure to hit certain EV sales targets decreasing the urgency for the dealership. Automakers, however, are in a prime position to fill in the gaps with their dealer partners, and there’s a payoff in the right alignment. Dealers receiving quality OEM support enjoy higher sales, garnering 88% more in EV sales than those who receive less support.

Story via Cox Automotive. Read the full study below to gain deeper insight into the collaboration needed to make EVs soar over the next decade: Cox Automotive Evolution of Mobility Study

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1 comment

Md.Monayem Hossain December 16, 2019 - 8:14 am

Environment friends Supper vehicle for future.


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