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Even as EV sales boomed in 2021, growing 80% from 2020, one fact remains clear: dealerships are not ready for the quick change from selling gas-powered vehicles to electric ones.
Most do not understand how the migration to EV sales will impact operations, and they remain unfamiliar with its long-term benefits to customers.
Further complicating electric vehicle sales is a global, digital shift in how companies conduct business. Evolving technologies mean customers now favor virtual journeys over in-person, physical alternatives. Dealerships lacking the right sales platforms to support remote buying experiences will fall behind in what will become an ultra-competitive market in the coming years.
This combination of insufficient know-how and technology means dealerships will struggle to leverage EV sales potential, as EVs only accounted for slightly over 7% of worldwide vehicle sales in 2021.
This article dives a little deeper into why electric vehicle sales are so challenging and how dealerships must prepare.
Four Challenges with Electric Vehicle Sales
With an anticipated 100 new electric vehicles set to hit the market in the coming years, it is unclear whether there will be enough demand if dealerships do not adjust their marketing and customer relationship strategies.
The following are four challenges that dealerships should anticipate:
1. Gaining Industry Knowledge
There is sufficient evidence that traditional dealerships still are not familiar with selling electric cars, even as they are preparing to sell more in the coming years.
Many dealerships are not keeping up with evolving sales techniques and industry knowledge needed to market electric vehicles. As a result, they are unprepared to accommodate the rising number of interested customers.
Considerable gaps remain in frontline sales personnel’s ability to articulate the total cost of ownership differences between electric and ICE beyond government and OEM subsidies. These include:
- Environmental and technical benefits
- Improves lifetime values
- Positive depreciation differences between EV and ICE vehicles
- Fewer maintenance appointments
Dealerships will be unable to sell EVs effectively if they cannot persuade customers that these vehicles are better for the environment and their wallets in the long run.
2. Finding Enthusiasm
Beyond a lack of EV industry knowledge is a lack of enthusiasm. Dealerships feel they have more incentive to prolong the ICE business model for as long as possible due to certain factors, which include:
- Concerns over revenue streams. Gas vehicles will continue to be more prevalent in the near term, and sales teams – understandably – are focused on what drives today’s commissions.
- The potential loss of process control. Dealerships do not want to compete with EV manufacturers that sell directly to the customer because they are unaccustomed to fighting for something they are used to getting quickly.
- Changing the status quo. A consumer could only acquire a new vehicle in years past through the dealer model. Simply put, dealerships are reluctant to move away from traditional processes that have worked for decades.
This mindset will only prove effective for so long as society gradually (and inevitably) makes a more decisive transition to EV.
3. Adapting to a New Customer Base
The tech-savvy initial buyers were already well-versed in minimizing carbon footprints and expected long-term financial savings from EVs. These customers were the proverbial low-hanging fruit, requiring minimal coaching or persuading.
However, as dealers look to expand their market and sell new products, they must appeal to customers who appreciate the “going green” idea but do not grasp EV concepts well enough to step away from ICE vehicles.
This group might include:
- The 9-5 workers with a considerable commute
- Busy parents with little time to deal with vehicle issues
- Retirees who know about EVs but are not well-versed in modern technologies
- Adventurers who spend their weekends on long road trips
Reaching these audiences will require more proactive measures. While many of the eco-aware early adopters approached auto companies about purchasing EVs, the opposite will be true for this second wave of customers. Dealerships must find new ways to identify and reach out to these potential buyers because they are less likely to make first contact.
4. Creating a Virtual Customer Lifecycle
The 2020 COVID-19 pandemic and resulting lockdown forced dealerships to communicate with customers in new digital ways. Brick-and-mortar showrooms became virtual tours, and phone calls became instant messages.
While governments worldwide have lifted most restrictions, customers in several industries acclimated to (and began to prefer) online interactions.
Two years later, the days of requiring customers to step into dealerships to negotiate purchases are gradually ending.
In fact, for some people, the only reason to go to a showroom and look at a car, whether an EV or not, is to test drive it. However, many people are even finding ways around that, looking to simulate a dealership test drive by borrowing a friend’s EV.
Dealerships must explore new and innovative cloud-based solutions for digitizing the end-to-end customer journey, which should include (but is not limited to):
- Finding potential customers
- Collecting accurate online inventory data
- Analyzing showroom activity
- Making actionable online quotes for trade-ins
- Providing top-notch customer support
- Offering non-traditional ways to perform service
- Completing comprehensive inspections and making the proper recommendations
- Delivering paperless follow-up information
Boosting Electric Vehicle Sales Requires the Right Technology
The move to electric vehicles is already underway, propelled by rising environmental concerns, government laws, and financial incentives, and the obstacles that this transformation presents are only growing.
Fortunately, dealerships can overcome the struggles of electric vehicle sales mentioned above by improving customer engagements with the correct sales methods and data-driven, integrated technology.
All | September 19, 2023