On this episode of Inside Automotive, Aaron Bickart, Executive Vice President & General Manager of OfferLogix, sits down with host Jim Fitzpatrick to discuss how the industry is changing in response to electric vehicles, and what dealers should do to prepare themselves for the still developing market.
Bickart notes that inventory has returned across the industry, especially for Stellantis. Consequently, the availabilities of rebate, incentive and lease offers have become more widespread. However, the most important discount for many automakers is the electric vehicle tax credit included in the Biden Administration’s Inflation Reduction Act. While the tax incentive has worked to draw more customers into the niche market, both retailers and OEMs struggle to navigate its complex qualification rules. Dealers will need to educate themselves on how to integrate the new credits into their business operations. Working with platforms like OfferLogix can offer companies guidance on how this new system works.
One of the most important steps for dealers to take when adjusting for EV tax credits is to train their employees. “The reality is it’s about training our salespeople,” explains Bickart, “because our salespeople really have no idea how to ingest that data.” Since customers are likely to be just as confused as dealer staff when it comes to these incentives, management teams will need to educate their teams on how the credits work. For example, many buyers believe that the rebate arrives when they file their taxes, when in reality many states allow the discount to be applied on the vehicle’s price at the time of purchase. Furthermore, not every transaction will earn for 100% of the $7,500, since some vehicles or buyers do not qualify for the full rebate. To avoid misleading their clients, sales departments should be thoroughly educated on these nuances as soon as possible.
The used car market could also stand to benefit from learning more about federal EV-focused programs. In 2024, customers will be able to earn up to 30% of the sales price or $4,000 on a used battery-powered car, opening up additional opportunities for preowned retailers. Bickart notes that this topic has rarely come up in re-marketing circles, which is why he hopes to spread awareness of the change. This benefit could help used car dealers find more stability next year, after their struggle to navigate post-COVID fluctuations in vehicle values.
