Overview
Want to know what’s really turning the car dealership world upside down?
Electric vehicles aren’t just changing the way we drive – they’re completely revolutionizing the way car dealerships operate. With EV sales projected to hit 8.1% of all light vehicle sales in 2024, dealerships are in a frenzy trying to keep up.
And there’s a real problem here…
Traditional dealerships were built on service departments earning 50% of revenue from oil changes, tune-ups and engine repairs. Electric vehicles are upending that model completely.
After reading this article you will understand why Car Dealerships are truly freaking out over EVs.
What you’ll discover:
- Why Car Dealerships Are Freaking Out Over EVs
- How Service Departments Are Being “Killed”
- New Revenue Streams Dealerships Are Creating
- The Training “Craze” That’s Going On
- What This Means for Car Buyers
Let’s jump in…
Why Car Dealerships Are Freaking Out Over EVs
There’s something the majority of people aren’t aware of…
An average car dealership makes more money from the service department than from car sales. Service and parts are typically 50% of a dealership’s gross profit, despite only being 15% of revenue.
Electric vehicles threaten to cut this revenue stream.
Why? Because EVs require 40% less maintenance than a traditional gas car. No oil changes. No spark plugs. No transmission fluid. No timing belts. No engine work.
That’s a huge profit center at risk right there.
Dealer word is that EVs are “killing” service departments. Sure, every oil change customer represents a lost opportunity to sell an EV or upgrade a battery, but dealerships with thriving service departments are winning big in this transition.
Electric vehicles need to be sold by service professionals. Dealerships that train their technicians to sell are killing it.
Smart dealerships have been positioning themselves well for the shift. Car dealership brands like your local Suzuki car dealer have been especially successful because they already have high customer trust and service expertise to leverage and expand into new EV-based revenue streams.
How Service Departments Are Being “Killed”
Here’s what’s happening behind the scenes in most service departments…
Cars that used to come in every 3-6 months for routine maintenance and repairs now don’t come in as much at all. EV owners might just bring their car in once per year instead of 4-6 times. That’s not just a slight adjustment – it’s an entire business model disruption.
Electric vehicles require specialized equipment and training. Dealerships are spending $50,000 to $100,000 just to install EV charging stations and diagnostic equipment.
Service technicians need to be re-certified. Working on high-voltage electrical systems isn’t something you can just learn over the weekend.
Some dealerships are even getting creative and selling extended warranties, software updates, and tire rotation services.
Others are turning to third-party maintenance and repair companies for non-automotive work.
New Revenue Streams Dealerships Are Creating
Smart dealerships aren’t just sitting around hoping their service revenue will just stick around.
They’re being aggressive in finding new revenue sources:
Charging Infrastructure: Dealerships are installing public charging stations and charging fees for their use. Some even becoming destination charging spots with cafes and lounges.
Software Services: EVs are basically computers on wheels. Dealerships are selling software updates, app installs, and other digital services that didn’t exist in the gasoline era.
Home Charging Solutions: Selling and installing home charging equipment is a big new revenue stream. Dealerships partner with electricians to provide complete setup services.
Extended Service Plans: Since EVs need less service, dealerships are selling packages that bundle everything from tire rotations to software updates.
The dealerships doing this best? They saw this coming and adapted early.
The Training “Craze” That’s Going On
I want to share something kind of insane with you…
Only 7% of U.S. car dealerships have spent absolutely no money on training their staff about EVs. Nada. Zip. They’re just expected to already know it all.
Guess how many salespeople know what “range anxiety” means? Zero. How many know how long it takes to charge an EV at home vs. a public charger? Zero. Do they know how much a home charger will cost or who to call to install it? Zero.
Guess what happens when a customer asks those questions. The sale falls flat. Or the customer goes to a dealership that can answer their questions.
Forward-thinking dealerships are:
- Sending sales teams to EV certification programs
- Hiring EV specialists who understand battery tech and charging infrastructure
- Creating entire dedicated EV sales areas with charging demonstrations and all that fun stuff
The dealerships that are investing in proper training are reaping the rewards. Customers trust staff who are knowledgeable and that trust translates directly into sales.
But here’s the problem…
The dealerships that invest in sales training are also training their service technicians on the new high-voltage electrical systems, charging infrastructure and software updates.
Most service department staff simply don’t know enough to answer basic customer questions. Range anxiety? Charging times? Home installation costs? This is make-or-break stuff for EV buyers.
What This Means for Car Buyers
This transformation isn’t just happening to car dealerships – it’s changing the entire car buying experience for customers too.
Better customer experience: Dealerships that invest in EV training provide a better overall customer experience. No more guessing on questions about charging, maintenance costs, or software updates.
More competitive pricing: Dealerships need to adapt their business models to the EV era. That means many are offering more attractive pricing to move volume and make up for service department losses.
Improved after-sales support: Smart dealerships are creating better after-sales ownership programs for EVs that include charging support, software updates, and special maintenance.
Of course, there’s a catch here too…
Not all dealerships are at the same place in their adoption curve. Some are still treating EVs like gasoline cars, leading to bad customer experiences and lost sales.
The dealerships that adapt are building long-term customer loyalty. Those that don’t are going to struggle as electric vehicle adoption accelerates.
Inventory and Sales Model Changes
Traditional car dealerships are used to quickly moving a lot of inventory. EVs are turning that model on its head too.
Sales projections show 20 million electric cars will be sold globally by 2025, but supply chains are still catching up. This has many dealerships moving from inventory-heavy business models to order-based systems where customers are more ok waiting 2-3 months for a specific EV model and configuration.
This causes new challenges:
- Dealerships have a lot less cash on hand without physical inventory
- CRM becomes more important for managing waiting period relationships
- Deposit and ordering processes need to be streamlined and flawless
Some dealerships are going direct with manufacturers to ensure predictable delivery timeframes. Others are focusing on used EV sales where inventory turns faster.
The Charging Infrastructure Support Challenge
Wait, there’s more… (yep, that’s right)
One of the key things most people don’t think about is that dealerships need to be charging experts, not just car experts.
Customers have a billion questions on home charging, public charging networks, charging speeds, etc.
Progressive dealerships are even installing different charging types for display and testing:
- Level 2 Chargers for customer use during service visits
- DC Fast Chargers for demonstrations and customer testing
- Home charging equipment for display and walk throughs
Dealerships that nail the charging education and support piece are closing more EV sales. It’s that simple.
Wrapping Up This EV Revolution
The electric vehicle revolution is forcing car dealerships to completely reinvent themselves. Service departments that used to earn 50% of dealership profits are being decimated. Sales processes are being upended. Staff training requirements are exploding.
The dealerships that are adapting quickly are already finding new opportunities. Charging infrastructure, software services, and comprehensive EV ownership programs are opening up brand new revenue streams.
For car buyers, this all means:
- Better trained sales staff at forward-thinking dealerships
- Better after-sales ownership support programs for EVs
- Competitive pricing as dealerships fight for market share
The dealerships that are properly training their staff on EVs, charging infrastructure, and customer education are positioning themselves for long-term success. The dealerships that are getting this all wrong? They’re going to get eaten alive as electric vehicles become more mainstream.
This isn’t just a trend. This is an entire industry transformation that is currently in process.
