Automotive, does it have the motivation to change?

Like an electric super car, change in the automotive industry is happening, fast. Are traditional OEM/car retail franchises going to survive? What is the future?

In the late 90s/00s there was a commercial property trend; UK banks closed high street branches and were replaced with wine bars and crap pubs like Wetherspoon's. As our high streets grow ever more empty, what’s the next commercial retail trend?

In Norway it’s not wine bars taking over the retail spaces once occupied with high street banks. It’s automotive companies. Not just any automotive companies, but the challengers: Polestar, Porsche, Tesla, Nio and more beyond.

I believe you can tell a lot by a country the minute you arrive at the airport — by the types of taxis waiting outside. Arrive in any Scandinavia country and you’d be hard pressed to find a Internal Combustion Engine (ICE) taxi. Electric is HUGE, none more so that in Bergen. I lived there from 2009–2016 and with clients there I returned many times before the Pandemic.

During my recent trip back to Bergen last week I witnessed the EV growth since my last visit in 2018. Almost every car on the road is electric or hybrid. Everyone I met or spoke to mentioned electric cars in conversation, without any prompt. Electric cars aren’t a boastful brag (Norwegians never boast, and it’s beautiful) it and many other forms of living more sustainably are part of the everyday tapestry that forms their lives.

As I walked around Bergen, witnessing four EV car retail spaces within 400metres of each other I thought it makes total sense. I know some examples of this exist at UK shopping malls like Westfield. But most OEM’s won’t allow franchise dealers to rent commercial high street space, but why make your customer do all the work to visit a website or an out-of-town industrial estate — take your brand and the future of EV to your customers. The high street spaces are right there, empty, crying for some EV retail love. Local councils vying for clean energy and ULEZ-style policies would surely be very pleased to offer good rates to house such brand offerings? it’s a win win? Do it before Brexit voting Whetherspoon’s owner expands. Oh he can’t, because, you know: the BREXIT he voted for has crippled his profits.

Vacuums suck?rubbish

Back in 2008, the Bergen Kommune (city council) decided that all future waste collection in the city centre should be shifted from bins and containers, to underground pipes. Seven years later in 2015 they officially opened BIR Nett — the world’s largest automated vacuum waste collection system covering 7sq km for over 356,000 inhabitants. Waste from each site is sucked to a central dump point at speeds of up to 70 kph. For rubbish that’s Tesla Launch Mode?speed.

Customers have an ID-key chip to access their allocated inlet. The inlets are multi-functional, from private households (shopping bags), business customers (100l bags) and passers-by can use three different hatches. Giving access to waste inlets 24 hours, 365 days a year. The cost? NOK 667million (￡52m).

‘Yeah but Norway is rich, they can afford this’, I hear you quibble. Well yes, but they’re not alone. Australia’s ‘sunshine state’, Queensland has already invested AU$ 21m in a similar system. China, South East Asia, South Korea, the Middle East and some European countries like Switzerland all have similar systems. The first system was created in Sweden (of course it was) in the 1960s, first installed in 1961 at Sollefte? Hospital. The first vacuum system for household waste, was installed in the residential district of ?r-Hallonbergen, Sweden in 1965. Sweden’s wider adoption of vacuum waste is one of the many reasons why as a country, Sweden sends only 1 percent of its household waste to landfill.

Throughout Scandinavia, in cities like Oslo, Norway, and Helsinki, Finland, city governments have installed electric elements (under-pavement heating) to keep them ice and snow-free. Amongst many reasons, heating the pavements is cheaper than clearing the snow and ice and hospital visits for slip-and-fall accidents have declined dramatically.

Here in the UK? There is one recycling vacuum system in Wembley Park, but beyond Wembley, vacuum waste hasn’t really taken off here in the U.K. In Richmond where I live, our weekly recycling collection is like a demolition derby where recycling bins are tossed, thrown and much of the contents left strewn in the wake of the refuse vehicle.

So, yeah, the UK is light years behind. Scandinavia are leading the way on living sustainably. I bloody love Scandinavians. Where was I? Cars.

Car dealerships are often out of town. On or near isolated industrial estates. Sprawling, vast car parking lots surrounding an aircraft hanger-sized building, branded and furnished just enough to make you think you’re not in a former parcel distribution centre, but a plush Original Equipment Manufacturer (OEM) brand?‘space’.

Expensive to build, operate and difficult to retain dedicated staff. That’s before we discuss the typical, traditional, antiquated mindsets of the people ‘running’ the business and selling the vehicles. Mention ‘car salesman’ to anyone and they’ll wince, am I right? That beeping noise you can hear — that’s the audible mindset of dealership franchises, stuck in reverse.

The vast majority of the car retail business is a slow, reversing, pedal-to-the-medal-carbon-internal-combusting-refusal-to-change. Heading backwards to the scene of its own fatality.

Pre-occupied with trying (and failing) to compete and remain relevant with the ‘disruptors’ or challengers is a better use of noun. Change to the UK Car dealership network groups is like what Pirate Bay was to the music industry, but that would be a dis-service to Pirate Bay; the UK car market in this analogy would be more like comparing the gramophone to Spotify.

Change = information + incentivisation

A Tesla Supercharger electric vehicle charging station in Skei, Norway. Photo by Sean Gallup/Getty Images

Over the course of 2021, 65% of new car registrations in the country were all-electric Battery Electric Vehicles (BEVs) and 28% were hybrids (22% plug-in hybrid, 6% non-plug hybrid), shows data from OFV, the Norwegian Road Traffic Information Council. Norway is leagues ahead when it comes to Electric Vehicles (EVs). Not because they love technology and leading a commendably, more sustainable lifestyle.

Norwegian figures for 2021 indicate massive growth in the country’s EV market. In 2018, 31% of cars sold were BEVs, increasing to 42% the following year, and 54% in 2020. The Norwegian governments goal for 2025 is all new cars sold will be BEVs. By 2021 Tesla overtook Volkswagen as the number one selling car brand in Norway after an 11 year reign.

In the UK — we’re aiming to stop selling ICE (Internal Combustion Engine) vehicles by 2030. Go UK!

Growth for Norway’s EV market is the result of a series of wide-ranging policies transforming the traditional perceptions of EVs as too expensive, or lacking in range. More than a dozen different taxes, subsidies and regulations have aided the country’s automobile EV/BEV (Battery Electric Vehicle) market, including VAT exemptions for BEVs, one-off registration taxes that increase if a car has more emissions, lower annual ownership taxes for BEVs, exemptions from road tolls and reduced ferry toll rates for BEVs, differentiated parking fees, significant public investment in charging networks, and bus lanes opening up to BEVs. Bus lane usage. Imagine that in London!

The impact of EVs’ increasing share of Norway’s car market will take time to trickle down to the wider roll-out of EV cars on the country’s roads. But given Norway generates more than 90% of its electricity from hydroelectric dams, they’re also better placed to provide the infrastructure with access to the power required to charge their adoption of EV/BEV. This despite being one of the world’s coldest countries, and therefore not very suitable for battery operated electric vehicles (EVs)!

Meanwhile here in Richmond, within a square mile, we have one high-speed charging point located at a fossil fuel station. When it does work, there’s a queue. My wife car supplied by her employer is a Range Rover Velor (hybrid) and we’ve never been able to charge it.

Education & Accessibility

The Norwegian government actively promotes the country’s many sustainable travel options to locals and visitors through state owned travel board Innovation Norway.

It’s easy to rent an EV from most car rental firms throughout the country. Enabling you to easily cruise the fjords, go whale watching on electric powered boats or use an electric cable car up a mountain.

Meanwhile here in the UK charging stations are reserved for the few who can afford to install expensive fast-charging points at home, or low-powered plug-in at home, (some) motorway service stations and local government ‘Medium Voltage’ lamp-post charging points.

What’s the recharge capability of plugging your EV in to a lamp-post?

Typically they operate at 5.5kW. So, to recharge a 54kWh Tesla Model 3 standard range battery would take 10 hours or more with the higher grade 7.4kW/32 Amp charging cable.

Ultra-rapid DC chargers provide power at 100 kW or more. These are typically either 100 kW, 150 kW, or 350 kWEVs capable of accepting 100 kW or more, charging times are kept to just 20–30 minutes for a typical charge. As of February 2023, there are 7,426 rapid and ultra-rapid charging devices, across 4,170 rapid and ultra-rapid charging locations in the UK.

Norway has 17,000 charging stations across a country that’s mostly mountainous and often isolated terrain, this is particularly impressive. This includes more than 12,000 fast chargers. And you won’t need to travel more than 30 miles to find your nearest rapid charge point. That’s right, thirty miles.

Retail: All change,?please

Successive UK Governments have done little to invest or prepare for what’s coming; including their own ban. Infrastructure for BEVs or EVs is woefully inadequate. Without this the Government have very little to incentivise the nation because they’ve nothing to advertise to promote the necessity to make the switch from ICE to?BEV.

Retailer research by Autotrader revealed that 79% (3 out of 4!) retailers don’t think ‘the 2030 [ICE] ban is viable’. 60% said their ‘not ready to sell EVs’. 32% commented they ‘need training’ and 23% said ‘I don’t plan on selling EVs’. Traditional mindsets with their head up their ass, buried in the sand, fingers in ears, singing ‘lalalalala’.

Franchise dealerships are more buoyant concerning EV readiness. They have to say they are ready, they’re beholden to their OEM franchise contracts and OEMs are pushing EV, hard. Franchise dealerships are also set to change with massive implications.

OEM brands like Alfa Romeo, DS have already set a timeline for their switch to Agency selling model by mid-2023,. Volkswagen, Mercedes, Audi, Volvo Jaguar Land Rover, Bentley, BMW are all rolling-out the selling their models, i.e. Agency Model = No-haggle car sales. Ensure there’s a single, fixed price across all dealers, whether they are showroom-based or online. Basically removing the ability for franchisees to mark-up and increase their profit margin on any model. A move that’s meant optimise on and offline touch points in line with their ‘digital transformation’ has caught the dealership franchise with their trousers round their ankles stumbling out the boardroom spluttering like an old MG.

What does this mean for customers?

You won’t be able to haggle over what you’ll pay for a car, and these showrooms may be virtual rather than physical. Change is coming and it’s called technology. Every car salespersons worst nightmare: Change + Technology. Music to the ears of Cazoo, HeyCar, Carwow, et al.

All this and alternative fuelled cars already outsold ICE for the first time in 2022. By 2030 it is expected that more than a quarter of all cars (At the end of September 2022, there were 40.8 million: source RAC).

You can not not afford to communicate, especially to 41% of car?owners

Traditional OEM’s haven’t been so slow to bring EV/BEV to market, but their communications is staggeringly complicated. A recent study by Autotrader, Igniting Change highlighted another (ready for a surprise?) nugget: ‘Women aren’t communicated to properly and this is particularly true on the road to electric. They are left behind.’ This despite 19million [UK] women hold a valid driving license, 41% of all privately kept cars were owned by women (16.7million cars). And yet the [male dominated] automotive industry is not doing a good job at representing them. Neither, I might add is the marketing and advertising industry.

Autotraders research revealed:

• 1 in 5 women haven’t even looked in to electric cars’
• 1 in 4 think they’re much more expensive to run
• 2 in 3 don’t know about Government incentives
• 3 times more likely to say they haven’t heard about 2030 ban

And confusion in communicating the tech remains… ‘Gross vs net-useable’, ‘dynamic torque vectoring’, ‘independent motors for improved redundancy’, ‘deliver of 695Nm of instant torque’, ‘Warrant for 70% of its charge capacity’, ‘Single-phase or three-phase supply’, ‘AC’/DC rectifier converts the alternative current’. These are some examples of the nonsensical bullshit pushed by OEMs.

For automotive brands to really connect with women they and their marketing teams and advertising agencies need to understand what women value and what they want. They should speak to Paco Underhill.

Too much jargon is a turn-off for women and most men. Men might pretend and nod but speaking for myself, I love cars, I haven’t a clue what much of this means. Communication could be more effective by using familiar terminology. For women especially, Autotraders research found that ‘women use more expressive and emotional language when talking about their car.’ Basically: use plain English that celebrates the fun and love for EV.

Automotive, does it have the motivation to?change?

From my experience working in and around the automotive industry for years, no. Don’t get me wrong. There are talented, motivated people investing in trying to change. Their greatest challenge is not customers. It is from within. An industry mostly populated by men, of a certain age, reluctant to change or adoption of new processes, nevermind ‘digital transformation’.

Independents will go out of business unless they adapt, and quickly.

Retail franchise dealers will struggle to survive. Digital transformation is not being adopted and change is being met with blissful denial.

Those lucky enough to be independent and (theoretically) more flexible, who own the land their dealerships reside over need to start developing those plots to accommodate the change. To apply the same investment in physical transform as they are in digital.

Car dealerships are vast spaces, often central to the community they reside in. Well known, established beacons of the commune. How best to start serving their communities — transform their current car park lots to EV charging points with restaurants, gyms, shops. Invest in companies like Nio who are leading the way in pioneering battery swapping centres.

Turn dealerships in to useful, go-to-community hubs. Think ‘Genius Bar’ but for four wheels: EV, BEV and Hydrogen education and testing while you charge your car.

Appendix: Challengers, arise

Before I visited Bergen I’d not heard of Nio. Worth checking out their site and videos — their ‘NIO Power Swap — Fully-automatic battery swap in just a short coffee break.’ is an astoundingly great idea if they can expand their network. No more waiting for a charging point then a 30–40min charge time. Three minutes, battery swapped, on you go. That’s the [current] future, for now.

One look at their homepages is enough to see why these challengers are miles ahead. The design, the language and tone is… exciting. It gets me excited about cars. Driving one is so much fun. And isn’t that the point: ‘use plain English that celebrates the fun and love for EV.’

Electrifying.