Electric vehicles are the future of the American auto industry – if dealers know how to sell them

“The consumer in central America is just not there yet,” he said when it comes to switching to electric vehicles, referring to the long distances many of his customers drive daily and a lack of charging infrastructure outside of major cities.

As drivers and investors buzz about the coming era of the electric car, many dealers say they are struggling to reconcile that enthusiasm with today’s reality on new car lots where last year battery-powered vehicles were good for less than 2% of US auto sales.

Most consumers who come to showrooms don’t shop for electric cars, and with relatively low gasoline prices, even hybrid models can be difficult to sell, dealers and industry analysts say.

Automakers are aggressively committed to expanding their electric vehicle offering with dozens of new models to be released in the coming years. Some, like GM, set hard targets for when they plan to phase out gas vehicles completely.

Many dealers say this puts them in a delicate place: they are trying to adapt, but are not sure if and how quickly customers will make the switch. About 180 GM dealers, or about 20%, have decided to give up their Cadillac franchises instead of investing in expensive upgrades that GM needed to sell electric cars.

A GM spokesperson said the company expected some Cadillac dealers to opt out and is pleased that the roughly 700 remaining share their all-electric goals.

Previous efforts by car companies to expand electric car sales have largely failed, leaving retailers with unsold inventory. Even today, some dealers say they are reluctant to stock up on electric models en masse.

“The biggest challenge is that dealers have a little boy who cried wolf syndrome,” said Massachusetts dealer Chris Lemley.

Car companies have been promising to make electric cars mainstream for years, but only produced small niche models, he said. He remembers Ford Motor Co.

rolling out a fully electric Focus that sold poorly and was on its lot. It was discontinued in 2018.

“So when we’re told, ‘This time we really mean it,’ it’s easy to be skeptical,” added Mr. Lemley.

Some customers are also insecure. Joe Daniel, an energy analyst with the Union of Concerned Scientists, said he was determined to buy an electric car but eventually gave up after realizing there weren’t enough public charging points near his apartment. Washington, DC Without an electrical outlet. in, the purchase made little sense, he added.

“In order for electric cars to take off, they have to be as handy as gas-powered cars – that’s the whole point of this big purchase,” said Mr Daniel.

To solve these kinds of problems, President Biden has said he wants to spend billions of dollars to upgrade the country’s charging infrastructure as part of an effort to boost battery-powered cars.

Ford, GM and other major auto companies say they are confident in their range of new electric vehicles and trained dealers to sell and service them.

Still, some car dealers say they are concerned about the long-term implications for their business.

Tesla Inc.’s

Influence in the electric car market has created a new standard for car buyers, offering an online transaction and a simplified line-up without price negotiation. Other electric vehicle startups, such as Rivian Automotive and Lucid Motors, say they will also sell directly to consumers, bypassing traditional dealerships.

Some auto companies are now following suit by initially stocking dealer lots with few or no electric models and allowing customers to order more directly from the manufacturer.

Håkan Samuelsson, CEO of Volvo Cars, recently said that all future battery-electric vehicles would be sold exclusively online and that the price would be set centrally, making it impossible to negotiate. Dealers will help deliver vehicles to customers as well as perform other services, such as maintenance, he said.

“The market is shifting from physical dealerships to online. That’s what will happen in the next 10 years, ”said Mr Samuelsson.

Howard Drake, a GM dealer in Los Angeles, said he is considering converting two of its showrooms. Rather than segregating models by make, he is considering two stores: one for electric cars and the other for gas vehicles.

“These are really different customers,” said Mr. Drake. “A Hummer EV buyer probably doesn’t want to sit next to someone buying a gas guzzling pickup truck.”

Mr. Sowers said he sees encouraging signs. GM recently lowered the sticker price of the all-electric Bolt and boosted sales of the model in February. But he said his electric vehicle inventory will remain light because he is uncertain about longer-term demand.

“It’s very early,” said Mr. Sowers.

Once dealers figure out how to sell electric vehicles, another business problem awaits the service department.

Electric vehicles typically have fewer mechanical parts and do not require the same kind of maintenance as gas powered cars, such as changing the oil. That work right now is a major profit center for dealers.

“There will be an impact, but it may take three or four years to see the full effect,” said Mr Lemley. “That’s really my biggest question mark in all of this.”

—William Boston contributed to this article.

Write to Nora Naughton at [email protected]