- Dealer Marketing Magazine

The State of EV

“Oh we gonna rock down to ELECTRIC AVENUE!”

We have all read and heard the recent headlines around the auto industry. Electric, electric, electric. It is coming fast and furious!

Depending on the source, the forecast for future electric vehicle sales vary, but recently with all the activity the sources and forecasts are starting to align on the growth potential and likelihood as being significant and expansive. It will no longer be a splinter niche customer set, but rather a significant profile and proportion of sales and even trending towards the majority.

According to a few sources, the likely truth will probably be somewhere in the following projections and forecasts:

Sopheon notes that the additional product offerings coming could push global EV sales to between six million and 11 million by 2025, rising to between 11 million and 19 million units a year by 2030
The real interesting pieces come from IHS Markit's forecast for 2021 and beyond. This year, the firm believes we'll see electric cars take a market share of 3.5%, just about double from 2020's number. Fast forward to 2025 and the company forecasts EVs will make up 10% of all new cars sold. That would be a massive shift in buying trends.
According to Edmunds, by the end of 2021 there will be 26 electric vehicles available for sale across the sedan, truck and SUV segments. That is expected to grow significantly over the next 5 years with as many as half the models for sale in 2025 having EV options.

So EV is here and coming in an even more substantive way. What does it all mean? How will car buying, owning and servicing change? What does this shift do to retailers? In fact, what will the very retail footprint and experience need to look like to accommodate this market disruption?

A few quick questions I have heard?

Do I need to treat an EV customer different from my “normal” customers?
Will I need a separate showroom or sales process?
How will this affect my service business?
What other considerations will I need to train my staff for in selling EV’s?

The answer to each one of these is that there will be differences and nuances that need to be accounted for with EV customers and products. But the amount of change needed depends on your current dealership’s focus. If you are a retailer focused on customer experience and lifetime value as two key driving forces and metrics of success, then the change may not seem as drastic. If your store is more transactional based and price and profit are the only main drivers of operations, the EV customers and opportunities may be tougher to capitalize on.

So What Really Changes for Retail? We Just Sell Cars, Right?

Wrong. The bottom line is that the very retail model will have to adapt and shift. Retail will not be about moving product, or transactional based, but it must become first and foremost centered on experiences. Electric vehicles require a different value proposition as part of the sales process. The service experience will also be very unique for these products and owners. The focus needs to be on truly meeting the customer’s needs, value, and overall experience. Retail itself must become synonymous not just with the purchase, and not just the physical in-store engagement, but rather the entire customer engagement process along their entire journey.

There was already major transformation coming in the industry due to technology and customer expectations, but the significant uptick in electric vehicle availability, sales and ownership will continue to disrupt retailers to become more of a mobility platform and mobility experience center. Rather than try and detail all the changes that will have to come and the capabilities that retailers will have to develop, consider the following graphic. This is just a high-level framework of some thoughts on how a future auto retailer will have to focus, operate and thrive.

We can certainly debate the major function headings, or the specific services and functions themselves, but the fact remains that even if 80% accurate, this is quite a shift from the current operations and focus of today’s retailer.

Why will this shift happen? Notice I said “will” not “if” or “might”. There are too many disruptive forces coming to play into the auto industry and the auto retail environment.

Major Challenges and Disruptions

Growing customer expectations (On Demand Economy / Instant Access)
Mobility needs shifting
Disruptive technologies (Connected, 5G, Autonomous, Electric, Digital)
Electric vehicle growth (global view and movement)
Autonomous vehicle technology
On Demand services (including vehicle features themselves)
Covid after-effects / Urban exiting / Virtual working (commute)
Increasing mobility choices (mode, access)

All of these factors and many more will demand a new retail model. One that engages customers to meet their mobility needs in any and every way possible. That will need to include micro-leasing, access on demand, fleet / rental options, subscription services, mobile services, downloadable software, pay-by-the-mile, features-on-demand, and much more.

Imagine a customer virtually test driving a vehicle, and specific features and accessories via virtual reality from the comfort of their own home. Then having the electric vehicle for the weekend, dropped off at their house. They return the vehicle to the dealer, cash in their energy tokens, and then purchase a mobility monthly subscription pass for the dealer’s mobility platform options. Sound far-fetched? It is happening in pieces through various companies and channels now. It will be up to auto retailers to become the one platform to provide (or at least manage) these services in order to keep customers engaged and to be sustainable and meaningful into the future.

Shift Happens

So how do retailers get ahead of this rather than trying to chase the opportunity when it is too late? This must happen with adaptive strategy and operations. A few key action plans include:

Assess what drives your operation and how can it become more customer experience focused (what you measure is what will matter)
Continually develop customer data and insight to always be prepared to meet the customer where they are in their mobility needs
Begin to view and structure your operations not as departments, not as inventory and assets, but as seamless and frictionless enablers to capabilities.
Define your North Star. What will make your dealership different? What will truly separate your customer experience from the dealership down the street?
Enable employees to do what is right, not what is standard and expected.
Leverage technology to enable frictionless experiences, not become more cumbersome.
Always be customer-focused, agile and adaptive to their shifting needs

These capabilities will insure deeper customer connection and engagement. What you sell in the future may change, but it will not matter if the basic customer experience is not there now, tomorrow and along the way; because your customer will go to where they can receive the best experience. Customer experience is the bridge from the present to the future, from the known to the unknown. Our future monthly operating report and operational structure will look much different than today, but the core customer experience fundamentals must exist continuously to survive and thrive in that new world.