As the automotive industry experiences a rapid acceleration of electric vehicle trends, dealerships must adapt to this changing landscape to seize new business opportunities. Transitioning to EVs involves more than just updating service departments—sales teams must be equipped to guide buyers through this significant shift. Understanding customer needs, acquiring product knowledge, and implementing effective follow-up strategies are essential for success. Additionally, the rise in wholesale buyers seeking used EVs is driven by increased affordability as more models flood the market.
Randy Barone, Vice President of Business Development at ACV, and Doug Hadden, ACV Vice President, discuss key considerations for dealerships during this transformative period in an interview with CBT News.
CBT News: How can car dealerships embrace the acceleration of electric vehicle trends?
Randy Barone and Doug Hadden: It’s important that dealers recognize the acceleration of electric vehicle trends and utilize it as an opportunity to grow their businesses. That being said, this transition goes beyond just updating your service department offerings. Your sales department needs to be prepared to guide buyers through this major change. Dealers need to understand what car buyers want to know, especially those who are purchasing an electric or hybrid vehicle for the first time. For example, what is the maximum range of the vehicle’s battery? How does EV maintenance differ from that of a traditional internal combustion engine (ICE)? With a wider variety of models, brands and sizes, dealers who offer a variety of options will ensure that buyers find an EV that fits their unique needs. Dealers also need to emphasize the lower overall costs associated with EVs, as they have less necessary maintenance costs and higher fuel efficiency. It comes down to three things:
- Understand the customer’s needs. A customer with a family of six may want a compact EV to avoid high gas prices but will it ultimately meet their needs? Practicality lives on long after the newness wears off.
- Sales teams need product knowledge. Most unanswered product questions can be overcome by the excitement of acquiring a new or used vehicle. This may not be the same when it comes to selling EVs. Customers will need to be “trained” and educated on what their new vehicle is capable of and how to take advantage of the new built-in technologies.
- Follow up! It will be more important than ever for dealers to follow up with customers as they acclimate to their new EVs. Sending an email that offers a survey in exchange for a free tank of gas will no longer make sense. It doesn’t help customers understand the benefits that their new vehicles and new vehicle dealers have to offer.
CBT: What is driving the increase in wholesale buyers looking for used EVs?
RB and DH: The broader industry is seeing the electric vehicle space become more crowded as more brands and models roll onto lots. That being said, they want to keep price competition in a tighter environment, so as more vehicle models become available, prices are more affordable.
Earlier this year, in January, ACV saw that All-Electric, Hybrid, and Plug-in Hybrid vehicles’ age ranges have increased in sales since the beginning of 2022.
January 2023 was a record month for EVs at ACV sold in the hybrid/EV category. This was an 18% increase over the previous record, which was in March 2022, and an 80% increase over January 2022.
CBT: Do you think used EV prices will keep falling throughout 2023? Or do you expect them to stabilize at some point?
RB and DH: The broader industry is seeing the EV space becoming more crowded. As more brands expand their portfolios of electric vehicle offerings, consumers will have greater access to vehicles at their preferred price points.
We are seeing that more of these vehicles are hitting the market, and not just the expensive ones. You are seeing more of what we would call regular electric vehicles making a splash, as opposed to the more expensive Teslas, Rivians, and Lucids. The hybrids are still bringing strong money and will continue because of limited supply. Plus, consumers often feel more confident with a hybrid versus electric vehicle because of the fears around charging. These fears include not being able to charge, getting stranded, being at a place of residence that doesn’t support charging or having to wait for long periods of time to charge.
CBT: What are the top three things dealers must keep in mind during the shift to electric vehicles?
RB and DH: Dealers must consider the following factors as the shift toward electric vehicles continues:
- Dealers must have a simple process of training and educating potential buyers of EVs on how to set up charging stations and find locations to charge. Quick video clips are a great way to show the ease of owning and maintaining these vehicles.
- Train, Train, Train: Dealers must also educate and train their own people on why an EV is an easy ownership option for buyers. They need to be able to discuss features versus benefits and the cost of ownership. They need to make the purchase simple and easy, with home delivery, professional explanation of use, and consistent follow-up.
- We still need to support the EVs and ICE’s vehicle trades. We need to make the process seamless and well-supported for those who are looking to trade in used cars, turn around the vehicle and increase sales.
