As Manufacturers Hype a Brave New World of EVs, Dealers Hop on Board
Updated: Jan 14, 2022
By Charlie Gilchrist
Whether America is ready or not, a flood of new electric vehicles will soon arrive. Of course, they will add to the many fine electric vehicles, from manufacturers as varied as Chevrolet, Volkswagen, Volvo, Tesla, BMW, Ford and others, already traveling the streets of North Texas. As of September, more than 33,000 electric vehicles were registered in North Texas alone, while statewide there are nearly 100,000 electric vehicles in private use.
Texas may be Big Oil, but we also rank third in the nation, after California and Florida, for EV ownership.
Just a decade ago, the market was completely different. It seemed then that the only buyers for the first generation of the high-priced electric cars were the financially well-off techies, rushing to be the first to join an automotive landscape requiring zero gasoline. Aside from that first wave of impulse buyers, the overall sales numbers for most manufacturers’ EVs were largely unimpressive.
Things change. Today’s electric vehicles are often some of the newest vehicles in high demand. General Motors claims it has already sold the first-year production of both the upcoming Hummer EV and the new Cadillac Lyriq electric luxury crossover. Even Ford has bragged about having over 100,000 orders for the upcoming all-electric F-Series pickup.
Still, many questions remain about whether the nation is ready to accept full-electric or plug-in hybrid electric vehicles as the sole possibility for new cars, SUVs and trucks. There are also questions as to who will be responsible for selling and servicing this new automotive paradigm.
Further, while federal and state governments initially offered incentives to entice potential buyers into more environmentally friendly vehicles, others now say that a hard mandate outlawing gasoline- and diesel-powered vehicles will best ensure the automotive buying public’s future choices are narrowed. The European Union certainly seems to be uniting behind mandates for EVs, while China, pushing the same line, prefers to call them New Energy Vehicles.
Meanwhile, OPEC released its most recent world oil demand report, postulating that oil will continue to be the primary source of energy for transportation even as far out as 2045.
Knowing that all of this is going on in the background, it’s time to decide how to properly manage the transition from 110 years of gasoline-powered vehicles to electric cars (which, in fact, were considered the most logical value for city dwellers early in the last century).
True, manufacturers and franchised dealers are making significant investments to train a new generation of technicians to handle this coming flood of electric and other high-tech vehicles; I can speak for Ford’s commitment to spend $500 million for those educational programs alone. However, just to be eligible to handle electric cars, a local dealer must invest well over $100,000 for the shop equipment and certification of master technicians.
And to be fair, we as dealers are excited about the electric vehicles promised for the market, but we’re also somewhat hesitant about whether the public demand will grow as quickly as real volumes of these vehicles arrive. For the most part, in spite of the hype, manufacturers, the public and even dealers are unsure of what comes next.
Certainly, franchised new-car dealers across America are not only gearing up, they’re also investing huge amounts of money to make sure when the transition comes it will be flawless for the public. As has always been the case, it is the new-car dealers that provide the buffer between the manufacturers’ vision of sales and the public’s willingness to purchase those vehicles in a timely fashion. The factories are always open, but the public doesn’t always buy on their schedule.
For the first time I can remember, however, I’m not positive the manufacturers are on the same page. True, it is stunning how much money the industry has committed to future electric vehicles—it now stands in the untold tens of billions. But not even the automakers are sure that bet is going to pay off anytime soon.
Likewise, many seem to believe that because wealthier individuals have been able to bypass the normal dealership experience for their electric cars, such as the Cadillac Lyriq selling out in mere minutes last month, this might become the norm. But it should also be remembered that Mitsubishi sold its original i-MiEV electric vehicle online with low acceptance.
That’s the object lesson car manufacturers have yet to learn: It’s easy to sell to the most well-to-do in America because they have lots of disposable income. But to sell all of the country and all of the price points, it’s actually America’s new-car dealers that have made our automotive market the envy of the world for over 100 years.
The transition to electric vehicles need not be any more difficult than the transition from family sedans to sport utility vehicles. New-car dealers made that happen, too.
Charlie Gilchrist is dealer principal at Gilchrist Automotive, which owns and operates 11 automobile dealerships in North Texas. He wrote this column for The Dallas Morning News. The article originally appeared on October 11, 2021.