Dealers struggle to sell electric cars
“The big challenge to selling EVs is training” car dealers, Pieter Nota confided over dinner one night during the Munich Auto Show.
Nota, the board member of management at BMW AG, was talking about the company’s network of 348 distributors across the United States. He was speaking with a small group of journalists who had joined him for a Bavarian repast in Munich to celebrate BMW’s launch of its first-ever electric SUV and electric sedan.
Nota declined to say how many of the company’s new EVs it hopes to sell in their first year. But the power and resources behind them are staggering. BMW will offer a fully electrified vehicle in nearly every one of its segments by 2023, he said. By 2024, BMW will have stopped making internal combustion engines at its main manufacturing plant in Munich. By 2025, it will have invested more than $32 billion in EV research and development.
“We are hitting the market exactly when the time is right,” Nota said. “When demand is rising and when charging is making strong progress.”
Seated next to Nota was Tom Moloughney, an expert in the field of electric vehicle adoption and the senior editor of the enthusiast website InsideEVs. Moloughney owned a MINI-E back in 2010, way before EVs were cool. In the following years, he hosted annual barbecues exclusive to his (few) EV-owning neighbors and friends in New Jersey. Soon, he earned a reputation as the guy in Chester Township, N.J., who would let you charge your battery in his driveway if it needed juice.
Moloughney has acquired more than 50 different EV chargers, all currently installed at his home. He spends much of his time visiting such manufacturers as Audi, BMW, Ford and Porsche, talking with executives about his real-world experience with the good, the bad and the ugly EVs. Most urgently, he focuses on what he calls the single critical component to the success or failure of any company trying to sell EVs: the folks who are selling them.
“One of the impediments to mass electrification is the fact that dealers are not as informed as they should be,” says Moloughney, who is also one of the architects of PlugStar, a program that helps consumers and dealers better understand and use electric vehicles.
The numbers bear out the issue: Pew Research reports that roughly 40% of Americans say they are somewhat likely to seriously consider buying an electric car. Consumer Reports puts that number as high as 71%. Still, actual sales of electric cars account for less than 2% of the market today.
“Selling an electric car [can take] three to four times as long as selling an internal combustion vehicle,” Moloughney says. “Salespeople don’t hate electric cars, it’s just that they’re there to make money. So if an EV takes them four times as long to sell, which car do you think they’ll try to sell?”
The Challenges of Selling Electric
Moloughney leads roughly 25 dealer classes a year, both online and in small groups at dealerships for “pretty much every established OEM ... except maybe Buick.” The logic is simple: Educate car dealers upfront about the nuances of owning an electric vehicle so they can speed up their sales process, thereby motivating them to sell more EVs.
There are a few reasons why consumers are hesitant to try out owning a first EV. First, it requires the consumer to change from refueling at a gas station to refueling at home. It forces them to think afresh about commuting and time management. Recently, with the introduction of viable new models from several well-known manufacturers, it may have forced them to consider patronizing a new auto brand.
And let’s be honest: Until lately, EVs haven’t looked great. “It’s a matter of education,” says Moloughney, emphasizing that, after rebates, incentives and tax credits, the cars are generally priced comparably to internal combustion counterparts. “Dealerships will be just as happy selling electric vehicles as they are gas cars,” he predicts. “As long as they really understand them — and how to discuss them and how to treat them.”
There are certainly plenty of electric vehicles to buy. In 2021 alone, Audi launched the e-Tron GT; BMW debuted the electric iX and i4; Mercedes-Benz launched the EQS sedan; and Cadillac launched the Lyric. (Sales results for those newbies, of course, are to be determined.) Rivian, Tesla, Lucid, Ford, Polestar and Rolls-Royce have all announced additional electric vehicles being delivered now or soon. Sales of Porsche’s electric Taycan sedan even surpassed those of the brand-favorite 911. Porsche has delivered 28,640 examples of the Taycan so far this year, compared to 27,972 versions of the 911.
The recent increase in electric options (most well-made and capable) has effectively steepened the learning curve dealers face when tasked with selling them. Salespeople now must familiarize themselves with how to maintain, repair, charge, store, move and drive each of them — even models from various automakers if they work at a multibrand dealership.
Salespeople must now also address a different buyer. While in years past consumers considering electric vehicles such as the BMW i3 or Tesla Model S tended to be tech-forward, eco-aware first-adopters already well-versed in the nuances of going green, automakers aiming to expand in the market and sell new wares now must appeal to “normal” consumers. That means people who don’t have the time — or even less, the inclination — to research EVs on their own: busy moms; workaday commuters; semi-retirees; and even weekend warriors who would rather be out hiking or mountain biking than having to think about which car to buy. Even otherwise EV-oblivious people who soon find themselves in a Tesla as a Hertz rental car may become curious about owning one.
“I haven’t seen any OEM that I know of that doesn’t feel like this will be a complete conversion over time [from ICE vehicles to EVs],” says Mark LaNeve, the chief business officer of Charge Enterprises. “But the consumer will come along a little bit slower … and the dealers are going to play a very critical role.”
New Perks for Drivers, But Also New Hurdles
Moloughney says that more than 90% of the dealers he visits are not aware of all of the incentives available for a given EV. It is a complex quagmire to navigate. Trade-in values for and against EVs vary, and layers of federal, state and regional incentives — in addition to standard tax breaks — must be learned and explained.
