EV Success against All Odds

It seems like a simple proposition.?The government allocates billions of dollars for EV infrastructure and supply chain enhancements, offers tax credits for EV vehicle purchases, and convinces auto maker CEOs to sing the virtues of electrification and invest billions in battery plants.?What could possibly go wrong?

Let me count the ways.

1. China controls the raw material and supply chains for battery technology.?This is a threat to national security and, now, the prominence of the U.S. in the automotive industry.
2. The global automotive supply chain itself may be undermined as the average EV has 40% less mechanical “content” than an internal combustion engine vehicle, according to industry sources.
3. Workers and their jobs on production lines are threatened as EVs may require 70% fewer workers to assemble the vehicles, just ask the UAW.
4. Dealers are threatened by the onset of EVs as emerging EV makers seek to sell directly and EVs diminish vehicle maintenance and aftermarket opportunities.

It appears clear that governments anticipated the antipathy that the automotive sector would have for electrification – which is why the U.S., E.U., and China all leaned heavily into EV mandates and incentives, knowing resistance would be stiff.?The only question remaining is whether it will be futile.

Let’s be clear.?Workers, dealers, senior management, suppliers, and consumers were all either opposed to or skeptical of the EV transition.?It was as if everyone collectively was being told to eat their broccoli.

There were two, no three, elephants in the room: climate change, China, and Elon Musk.?Petroleum propulsion had to go for societal, political, and competitive reasons.

Workers don’t like it.?The current negotiations between the auto industry and the United Auto Workers union hinge on mitigating the impact of electrification on production line employment – (artificial intelligence concerns take a back seat).

Senior managers don’t like it.?New EVs with their new software-driven architectures are whipsawing product development organizations and management structures.?No department, no team, no job is safe.

Dealers don’t like it.?Car makers are demanding that dealers make six-figure investments in training and infrastructure to support EVs even as internal combustion vehicles continue to dominate sales (and for the foreseeable future).

But consumers REALLY don’t like it – at least according to JD Power & Associates.?Whether its charging stations or in-vehicle tech in EVs, consumers have rendered their verdict and it appears to be thumbs down.

https://gmauthority.com/blog/2023/08/ev-owners-increasingly-dissatisfied-with-public-charging-stations-j-d-power-study-shows/

https://www.autonews.com/mobility-report/jd-power-evs-have-more-tech-issues-gas-vehicles

And if it's not enough to know that consumers are unhappy:

“45% of U.S. Car Dealers Won’t Sell You an EV; Here’s What’s Going on” - https://electrek.co/2023/05/09/us-car-dealers-evs/

Newspapers, podcasters, and bloggers talk about unsold EVs piling up.?Analysts talk about hybrid sales gaining ground.?It all paints a dire picture of EV non-adoption. And yet...

It’s difficult to maintain a view of the big picture – especially at the dawn of a fundamental market shift.?I don’t want to dump on dealers, but everything points to dealers as the weakest link in the customer EV acceptance chain.

When General Motors announced to its dealer population that they’d have to make six figure investments in personnel and equipment to qualify to sell Buick and Cadillac EVs, dozens surrendered their franchises.?It was just a hint of what EVs would face across the dealer community.

Of course, it didn’t have to be this way.?Car makers could have subsidized or eaten the cost of expensive EV-related upgrades, but car makers, instead, used the opportunity to “clean house” and skinny down their dealer networks.

Dealers aren’t stupid.?They’re protected by franchise laws in most states, but they can see when they’re being given the squeeze.

Tax credits were offered on EVs and dealers immediately started marking up cars by as much or more than those tax credits.?Dealers could clearly see and do clearly see that their bread and butter will continue to be internal combustion vehicles.?Selling EVs calls for an entirely different mindset – including a very different approach to aftermarket and service opportunities.

When I bought my EV last year my dealer was still waiting for the installation of a charging station.?There was no collateral in-store material intended to answer customer questions or explain EV propulsion and home or remote charging – even though the car maker was offering two years’ worth of free charging.

When I recently visited my BMW dealer to service my 2022 internal combustion vehicle the dealer cleverly nicked me for $350 for aligning, balancing, and rotating my tires.?My first year service for my EV included tire rotation and at least one recall campaign and a couple of software updates – total cost: $0.

That $0 is terrifying to a dealer and should never happen, but clearly my dealer is unaccustomed to selling a premium vehicle and upselling an EV owner.?There’s no strategy.?I could see the look on the service rep’s face and read his mind as I parked my EV and dropped off the keys: “Shit, another EV.”

That lack of enthusiasm for EVs among dealers is palpable and it is understandable.?But that lack of enthusiasm should not be projected onto consumers.

Consumers are on board.?They may be complaining to JD Power, but they can see the Tesla’s popping up all over their neighborhoods.?Make no mistake, EVs are getting all the latest technology – so it stands to reason that some of this stuff might not work or might be confusing.?Or maybe it’s just different and thereby earns a ding in a JD Power survey.

The charging problems of today will dissolve like polar ice caps.?EVs are here.?They’re hot.?Get used to them – even if your dealer is doubtful.?Transitions are never easy and that’s what we’re in the midst of.?The water is warm, in a good way – not like the Gulf of Mexico.

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