Dealers Supposedly Don't Want to Sell EVs!

[Jimrpa]

Has anyone seen this article? https://wapo.st/463h9Ot

My dealer was all about EVs when I bought mine. Has anyone else experienced what is presented in this article?

The first paragraph asserts that the BMW i3 was “sporty”? ? Do I HAVE to read the rest of the article, or can I do something more pleasurable, like gouge my eyes out with a fork? ?

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[Mach1E]

Our local Tesla store has demo vehicles for test drives. They actually loan them out to you and have you test drive it on your own. When I started to get interested, I rented a Tesla for a weekend road trip so I could not only spend a couple days with it, but also see how it felt on a longer road trip and how easy Tesla Supercharging was on the road.

Add a service center and used car lot and it becomes…………. A car dealership!

Same crap, different owner.

At least in my town almost all the dealers are locally owned. Yes, it’s a crap shoot as to whether or not the local owner would be better than corporate……. But at least we have options and can pick a competing dealer up the street.

If Ford corporate owned and ran all the dealerships, I’m not convinced it would be any better. The only thing that would happen is the consumer wouldn’t has as much of a choice on who to deal with.

 

[BigMach-E]

I like my dealership as far as dealerships go. Honestly, there are two dealerships in the Bay Area that are likely to get all of my business from here on out. My local Ford dealership is pretty decent, they are owned by a corporation, but they do good service and their sales department haven’t let me down too much. They seem very committed to EVs, and they know it’s likely to be a bit of a slog for a few years.

The Mazda dealership I like is owned by a group of dealerships of different brands all around the same block.

I think EVs are having a bit of a slump, and the OEMs who make them that were impacted by the UAW strike overproduced EVs because they were uncertain of the length and potential ramifications of the strike. This will all even out in a year or two.

There are so many factors (high interest rates, people jumping ship on their cars prematurely, those who bought to pocket the tax credit, the strike) that burst the bubble on EVs, but I really feel like we are beyond the tipping point in terms of adoption, this is just a slight slowdown.

 

[Ghost Ryder]

The first paragraph asserts that the BMW i3 was “sporty”? ? Do I HAVE to read the rest of the article, or can I do something more pleasurable, like gouge my eyes out with a fork? ?

the i3 had a carbon fiber tub and rear motor like a lot of exotics. Too bad it looked like a shrunken minivan and rode on bike tires.

 

[LNFitz]

My understanding is that dealerships are protected. Just as the country built-out the highway infrastructure, there was need for service (and sales). Tesla has shaken the system but the laws are still in place for Ford . This is going to change probably but it won't be pretty.

"What is the Automobile Dealers Franchise Act?

This law permits franchise automobile dealers to bring suit for damages, without regard to the amount in controversy, in United States District Courts for the failure of automobile manufacturers to act in good faith in performing or complying with any of the terms of the franchise or in terminating, cancelling or not ..."

 

[Kamuelaflyer]

At least in my town almost all the dealers are locally owned.

That’s a minority position these days and fast becoming an exception. Even dealerships appearing to be local often times are not, they may continue with local dealership names but they’re often part of a larger corporate entity. As an example, every Toyota dealer in my state is owned and held by the same entity. They continue with names from decades ago but they’re all owned by the same corporation who runs them as a group. Further, in the case of Toyota, the corporation also owns the distribution rights to Toyota in Hawaii.

Add a service center and used car lot and it becomes…………. A car dealership!

In my limited Tesla observation, I’ve yet to see a Tesla Sales Center be collocated with a Service Center. The two I’m most familiar with have those in very different locations. And, they have zero used cars on site. You order those just as you do for a new Tesla.

State mandated vertical restrictions always hurt the consumer. They hamstring manufacturers and benefit an only a few businesses under the guise of local choice.

 

[Kamuelaflyer]

That dealer has a monopoly on the island. And not much you can do about it.

Those are true statements and it applies to most of the state other than Oahu. When you have all but one dealer statewide engaging in identical ADM markups though, there's not much of a difference even there. It can be even worse than that – what happens when they stop selling Ford EVs and servicing them?

 

[Mach1E]

That’s a minority position these days and fast becoming an exception. Even dealerships appearing to be local often times are not, they may continue with local dealership names but they’re often part of a larger corporate entity. As an example, every Toyota dealer in my state is owned and held by the same entity. They continue with names from decades ago but they’re all owned by the same corporation who runs them as a group. Further, in the case of Toyota, the corporation also owns the distribution rights to Toyota in Hawaii.


In my limited Tesla observation, I’ve yet to see a Tesla Sales Center be collocated with a Service Center. The two I’m most familiar with have those in very different locations. And, they have zero used cars on site. You order those just as you do for a new Tesla.

State mandated vertical restrictions always hurt the consumer. They hamstring manufacturers and benefit an only a few businesses under the guise of local choice.

FWIW, I would be in favor of getting rid of the restrictive laws regarding dealers and manufacturer direct sales and let the free market decide.

I’m just afraid that if we went all manufacturer direct the consumer would be the one hurt. Could be a “be careful what you wish for” situation.

 

[dbsb3233]

FWIW, I would be in favor of getting rid of the restrictive laws regarding dealers and manufacturer direct sales and let the free market decide.

I’m just afraid that if we went all manufacturer direct the consumer would be the one hurt. Could be a “be careful what you wish for” situation.

Yeah, it's tricky. Switching to just manufacturer-direct sales means a monopoly. Usually monopolies are a bad thing. Many retailers competing to sell a product is usually a good thing, giving consumers a choice. If we could only buy a Ford Explorer direct from Ford at the price they set, and not be able to shop between multiple retailers (dealerships) for the best price, that's usually worse for consumers.

But having BOTH options available would be an improvement (the choice of buying from the dealer or direct from the manufacturer.) But probably not ONLY from the manufacturer.

 

[Mach1E]

Yeah, it's tricky. Switching to just manufacturer-direct sales means a monopoly. Usually monopolies are a bad thing. Many retailers competing to sell a product is usually a good thing, giving consumers a choice. If we could only buy a Ford Explorer direct from Ford at the price they set, and not be able to shop between multiple retailers (dealerships) for the best price, that's usually worse for consumers.

But having BOTH options available would be an improvement (the choice of buying from the dealer or direct from the manufacturer.) But probably not ONLY from the manufacturer.

I agree.

But my guess is that if we did have both options…… manufacturers would just cut the dealers out to make more profit for themselves.

Which is probably why the laws protecting dealerships exist in the first place.

In the end, dealers really don’t have much markup on new cars. Usually the profit on a used car is higher than a new one, despite the lower selling price.

And no one seems to care about that. We all accept the fact that you’ll trade in a car for $15,000 and they’ll retail it for $20,000. And that $5k is waaaay more profit than they make selling a $70k Mach E at full MSRP.

 

[AKgrampy]

Yeah, it's tricky. Switching to just manufacturer-direct sales means a monopoly. Usually monopolies are a bad thing. Many retailers competing to sell a product is usually a good thing, giving consumers a choice. If we could only buy a Ford Explorer direct from Ford at the price they set, and not be able to shop between multiple retailers (dealerships) for the best price, that's usually worse for consumers.

But having BOTH options available would be an improvement (the choice of buying from the dealer or direct from the manufacturer.) But probably not ONLY from the manufacturer.

Not advocating one way or the other but if it was an either option I could see dealers not honoring warranty work on vehicles they did not sell. Currently they do but my guess is things would change if direct sales were to be implemented.

 

[Ev Blau]

Yes. My dealership now sells every MME they get in (stock orders) to other dealerships, or they have Mannheim Auctions come in and sell them for them at a loss just to get rid of them.

Due to several factors, not the least of which is the power grid cannot support them installing a DC fast charger, they did not sign up to be an EV dealer beyond 31 Dec 23.

MikeG., you must be from my prior neck of the woods: near Lancaster PA. I had a friend who worked at Manheim Auctions years ago. Hoping to take a road trip from Bristol TN to Reading PA in 2024 when I hope MME’s have access to the Tesla charging network.

 

[George Knighton]

The conversion to EV affects dealer margins considerably.

A dealership is a stool held up by three legs:
(1)Car sales
(2)Service/Repair sales
(3)Finance commissions and warranty/service deals

Service and Repair as a major source of revenue is going to change. We just don't need that much service, and things tend not to break down.

As time goes on, the number of technicians is going to be reduced, and this will affect the perception of what the EV revolution is doing to the class of mechanics who were making a decent living working on vehicles that needed frequent maintenance.

I remember finding it remarkable when my first EV, a 2020 Chevy Bolt EV, had its first real service interval at 150,000 miles. This is when you needed to change the battery coolant. Up to then, it was just tyre rotations and cabin filter changes.

Dealerships just won't be making a lot of money on service and repair.

They'll still make money in the finance department, but it's going to change in that people are going to tend to buy fewer warranty and service plans because they just aren't going to need them.

Another big hurdle is the need to spend money on DC charging. Dealerships won't get away with just having a 240 volt EVSE in the back on an outside wall. They need to invest in real 400 volt DC chargers, and it's being required as a condition of continuing.

Some franchise agreements are extant, but the manufacturers are going to have a way to force this infrastructure improvement on almost every dealership.

My local Ford dealer is owned by the same people who own the Chevy dealer next door, so they've somehow manipulated things so that they have only had to install two 120 kW ABB units. LOL....

I noticed in the charging log of my MME GT PE that it was charged to 50% at the Chevy dealer the day before I signed for it.

Cadillac is reducing radically its list of dealerships, where it is possible to get rid of them. GM has threatened reticent dealerships and I'm sure Ford is doing the same thing.

I don't know if we can get mad about it. We're forcing a change in the way of life onto people, and they're not necessarily signing up for it voluntarily.

Dealership owners are clearly going to have to change their perceptions of how much money they're going to be making.

 

[Trax]

Hi all I’m a new owner as of this weekend. My dealer experience was a little different. I walked in with an incredible deal from Tesla as they are giving the $7500 federal tax credit on all leases automatically. However I didn’t like that they don’t offer lease buyouts after the term is up.

so I walked into Ford and said if they could match the pricing on the Model Y I would buy there and now. Well it almost worked. I did get a good deal as at one point before walking out they said to write a number, any number and he would see if they can match it. At the end of the day I got the premium model and paid more than the Y but tbh I didn’t want the Y. I’m not a fan of Elon these days and I think they are the most boring looking cars on the market.

interestingly enough tho when I priced the Mustang out online, it was a LOT cheaper. I could mark it up to predatory website play to get you into the dealer (that’s what they said too) but looking at my invoice, sure enough there were a lot of extras thrown in. However they seamed pretty eager to sell the Mach-e. Maybe trying to get rid of the inventory? Hmm.
All in all tho, I’m absolutely loving the car and get a ton of compliments on it. I’m happy but still left with a little doubt that I actually got the best deal I could lol.

 

[Mach1E]

Service and Repair as a major source of revenue is going to change. We just don't need that much service, and things tend not to break down.

Dealerships just won't be making a lot of money on service and repair.

They'll still make money in the finance department, but it's going to change in that people are going to tend to buy fewer warranty and service plans because they just aren't going to need them.

Well……… yes and no.

Currently ICE vehicles are more reliable than BEVs.

We definitely break down.

The difference isn’t about whether or not we break (we do). The difference is on maintenance (which we have very little).

So no oil changes, transmission service.

But we have all the other stuff that can (and will) break just like a gas car. (Power windows, A/C, etc).

The other difference is with all the stupid module updates. Those can take a full day clogging up a service stall……but generate very little revenue.

Not sure about BEV owners buying less extended warranties. That only may be true because of the longer “drivetrain warranty” of 8 years. Would have to see the data.

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