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Why Some Car Dealers in the US Hesitate to Sell Electric Vehicles?

Last Updated on June 30, 2024 by SPN Editor

Electric vehicles have emerged as a transformative force, yet there are nuanced challenges impeding their widespread adoption. Some car dealers in the US, the frontline of the automotive industry, find themselves grappling with uncertainties surrounding EV technology, slim profit margins, and slower sales, collectively contributing to a cautious stance on promoting electric mobility.

Car dealers in the US grapple with several impediments that dampen their enthusiasm for selling electric vehicles (EVs). Firstly, a notable 66% of car dealers in the US find themselves without any EVs for sale, highlighting a substantial gap in inventory.

Additionally, a significant 45% of surveyed dealers express a steadfast unwillingness to sell EVs, regardless of market demand, indicating a deep-rooted resistance to embracing electric mobility. Despite efforts like price reductions and generous tax credits, EV sales growth has failed to meet anticipated levels, potentially dissuading car dealers in the US from prioritizing electric vehicles in their inventory.

Surprisingly, even with tax credits of up to $7,500, a notable segment of the American population remains hesitant to switch to EVs, presenting a challenge for car dealers in the US aiming to align with consumer preferences. Adding to the complexity, certain automakers have scaled back production of EV models or deferred related investments, contributing to a less robust market for dealers. Collectively, these factors depict a scenario where car dealers in the US may not actively promote EVs to potential customers.

Despite these challenges, there exist compelling incentives for U.S. consumers to consider when contemplating an EV purchase. The federal government’s Internal Revenue Code Section 30D offers a tax credit of up to $7,500 for new plug-in EVs or fuel cell electric vehicles (FCVs), providing a substantial financial incentive.

Many states further sweeten the deal by offering rebates and tax deductions for those transitioning to electric vehicles, extending these bonuses to various EV categories, including plug-in hybrid electric vehicles (PHEVs) and electric motorcycles. Additionally, some utility companies extend incentives such as electricity discounts or bill credits, further enhancing affordability for EV owners.

The disconnect between car dealers in the US and EV consumers becomes evident through real-life anecdotes. James Richards, CEO of a water heating company, experienced a disconcerting lack of knowledge about EVs among car dealers’ staff during his test-driving ventures. This misalignment raises concerns, especially considering the ambitious targets set by the Biden Administration to have two-thirds of new cars sold in the U.S. be electric by 2032.

The U.S. government’s advocacy for electric vehicles (EVs) is a multifaceted initiative driven by diverse motivations. Firstly, in the realm of environmental harmony, EVs play a pivotal role by emitting zero pollutants from their tailpipes, contributing significantly to the reduction of air pollution and the broader fight against climate change. This strategic move positions EVs as crucial elements for fostering cleaner and healthier environments.

Moreover, the transition to EVs is envisioned as a catalyst for economic prosperity. The shift toward electric mobility aims to create jobs, strengthen supply chains, boost U.S. competitiveness, and ignite domestic manufacturing. The vision is for EVs to become not just vehicles but engines for economic growth, powering various sectors and industries.

At present, the market share of EVs has surged to 8.6%, reflecting a marked shift in consumer preferences toward eco-friendly and sustainable modes of transportation. The momentum of this shift is evident in the remarkable figure of over 4.1 million plug-in hybrid and battery electric vehicles finding homes since 2010.

Battery electric vehicles carve out a substantial 6.7% slice of light-duty vehicles sold in the U.S. When combined with the hybrid and plug-in hybrid vehicles, the collective force of EVs commands an impressive 16% share of light-duty vehicles sold.

Across U.S. states, electric vehicle adoption rates showcase significant variations, with California emerging as a standout leader. The zero-emission vehicles took center stage, constituting an outstanding 25% of new vehicle sales during the second quarter of 2023. This regional diversity underscores the sway of local influences on the widespread acceptance and integration of electric vehicles.

Boasting over 145,100 public charging ports, including both Level 2 and direct current fast chargers, and strategically positioned at more than 56,000 station locations, accessibility to charging stations is proliferating. This expansive network plays a crucial role in assuaging concerns related to range anxiety, thereby enhancing the overall convenience and embrace of electric vehicles.

A typical U.S. driver stands to reap substantial savings ranging from $6,000 to $12,000 over the lifetime of an EV compared to owning a traditional gas-powered vehicle. This economic incentive, coupled with the growing availability of incentives, amplifies the allure of electric vehicles for consumers, contributing significantly to their burgeoning popularity within the automotive market.

Questioning the behaviors of some car dealers in the US demands a closer look at the human side of the equation. Despite the support and incentives from the government, car dealers in the US are grappling with a dilemma that goes beyond the balance sheets.

Let us picture this, Selling electric vehicles (EVs) poses a unique challenge for some car dealers in the US, as highlighted by Buzz Smith, a former Chevrolet car salesman turned EV sales trainer. According to Smith, the sales process for an electric car is considerably longer compared to a traditional gas-powered vehicle.

While a gas car can be sold in as little as an hour during a single visit, selling an EV typically involves four separate visits, each lasting an hour. This extended process is attributed to customers’ thoroughness in understanding the technology, charging mechanisms, and other aspects of electric vehicles. Smith acknowledges the hurdles by noting, “So I’m volunteering to take a 75 percent pay cut — and no salesman wants to do that,” emphasizing the economic disincentives faced by dealers in the EV market.

The economic hurdles are intertwined with the human experience of selling EVs. The longer sales processes aren’t just about paperwork and negotiations; they represent a commitment to education and support as buyers navigate the transition to cleaner, more sustainable mobility.

Some car dealers in the US are not just facing economic challenges; they are evolving their approach to cater to a changing automotive industry. This evolution calls for a collaborative effort, not just from industry stakeholders and policymakers but from consumers themselves. Together, we can work towards a future where the journey to sustainable transportation is not just economically viable but also enriching for all involved.