Overview
The curious case of selling EVs is organized in the following sections:
Introduction
Auto dealers are critical partners in making sure low-income individuals can access EVs. For an EV customer to have a traditional car buying experience, dealers must be willing and have the expertise necessary to sell EVs. In other words, dealers must have a financial incentive to sell EVs over gas-powered cars and must be knowledgeable about how they work to efficiently sell them. If dealers do not have these two things, they can actually hurt EV sales. In fact, consumers have reported that “dealerships and salespeople have attempted to dissuade them from purchasing an EV.”[1] The reason: conventional cars make dealerships more money than EVs in the long run.[2]
Dealerships make more money on vehicle maintenance, service and parts than on sales. For example, gas-powered combustion engines have over 2,000 parts that can break at any time, requiring service.[3] Conventional cars also need regular oil changes. EVs on the other hand, “do not require the routine oil changes and service appointments that gasoline-powered cars do, which takes away from profits that come from routine maintenance.”[4] These profits are so significant that it’s “tough for dealers to ignore when instructing sales staff which cars to push on consumers and which to discourage drivers from purchasing.”[5] The result is a perverse incentive not to sell EVs.
This chapter describes how dealer education and financial incentives for selling EVs can help increase EV access in underserved communities.
*Dealer incentive and education issues are evolving. We will update this chapter as new developments occur in the field.
Tools and Guide
1. Education
Dealer education efforts should focus on increasing three types of EV-related knowledge:
- EV technology – How different EV technologies work (e.g. plug-in hybrids vs. battery electric vehicles)
- EV benefits – The environmental and cost-saving benefits of different EV technologies and models
- EV incentives – What incentives are available and how to apply for them: e.g. purchase incentives, financing assistance, HOV access, subsidized utility rates, charging station purchase incentives, etc.
Typically, this type of education happens at in-person workshops, over webinars or conference calls, or through on-site sessions. Dealership associations, EV purchase incentive administrators, or other interested EV stakeholders are natural groups to provide dealers this type of education. In California, the Center for Sustainable Energy, which administers California’s EV rebate, provides webinars and other types of education to dealers on a regular basis.
Equity Guide:
To the extent low-income EV purchase incentives and low-income financing assistance programs are available, education efforts should prioritize making dealers knowledgeable about these programs. This will ensure dealers are prepared to provide effective customer service to low-income individuals.
Tips for Success:
Auto dealer best practices for successfully selling EVs[6]
- Using an EV as their daily vehicle—the fastest way for sales people to learn about and become enthusiastic about EVs
- Outreach to local community groups and businesses for test-drive events at workplaces and other highly populated locations
- Participating in online EV user forums to answer questions and steer traffic to the dealership
- Maintaining a selection of 10–15 EVs during peak demand. These cars should be in good condition, cleaned, and charged. Information about incentives should be positioned prominently
- Featuring EVs alongside chargers (solar, if possible) to associate EVs with buyer values such as concerns for oil independence and environmental protection
2. Financial Incentives
Financial incentives can motivate dealers to sell EVs and encourage them to become more knowledgeable about EVs. Dealerships need financial incentives to overcome potential lost profits related to the fact that EVs have need less service and maintenance than conventional cars, which means dealerships lose out on service and part profits.
For example, Connecticut has the “first statewide EV incentive program to offer an additional incentive of up to $300 for dealerships for each eligible vehicle purchase or lease.”[7]
Local and state governments interested in increasing EV access in underserved communities should explore funding for dealership incentives.
Equity Guide:
Auto dealer incentive structures should be set up so that dealers get higher incentive amounts for selling EVs to low-income individuals. This will ensure dealers take the time to educate consumers about EVs and help them with any purchase incentive or financing assistance applications.
Tips for Success:
Dealership recognition can also play a role in motivating auto dealers to sell more EVs. For example, Connecticut, Massachusetts, and Vermont “have given awards to dealerships that sold high numbers of EVs.”[8] Giving awards to dealerships that sell the most EVs to low-income individuals makes the recognition program more equitable.
Helpful Links and Examples:
- Dealer incentive process for Connecticut program: See page 8.
Footnotes
- Kress, R. (December 08, 2015). Why Car Dealerships Struggle With Selling Electric Vehicles. The Fuse. Retrieved from http://energyfuse.org/why-car-dealerships-struggle-with-selling-electric-vehicles/
- Kress, R. (December 08, 2015). Why Car Dealerships Struggle With Selling Electric Vehicles. The Fuse. Retrieved from http://energyfuse.org/why-car-dealerships-struggle-with-selling-electric-vehicles/
- Kress, R. (December 08, 2015). Why Car Dealerships Struggle With Selling Electric Vehicles. The Fuse. Retrieved from http://energyfuse.org/why-car-dealerships-struggle-with-selling-electric-vehicles
- Kress, R. (December 08, 2015). Why Car Dealerships Struggle With Selling Electric Vehicles. The Fuse. Retrieved from http://energyfuse.org/why-car-dealerships-struggle-with-selling-electric-vehicles/
- Kress, R. (December 08, 2015). Why Car Dealerships Struggle With Selling Electric Vehicles. The Fuse. Retrieved from http://energyfuse.org/why-car-dealerships-struggle-with-selling-electric-vehicles/
- Based on University of California, Davis research, page 18. Retrieved from http://acadiacenter.org/wp-content/uploads/2015/10/ChargingUp_DIGITAL_ElectricVehicleReport_Oct2015.pdf
- Center for Sustainable Energy. Retrieved from https://energycenter.org/programs/cheapr
- Based on University of California, Davis research, page 18. Retrieved from http://acadiacenter.org/wp-content/uploads/2015/10/ChargingUp_DIGITAL_ElectricVehicleReport_Oct2015.pdf
