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Car Dealers Are The Other Biggest Drag On EV Sales And It's Time We Change That

I’m going to be blunt and completely honest, car dealers have erected a huge roadblock on our path to a sustainable transportation future. They are the second largest obstacle to EV sales growth, and actually have a major role in the first obstacle too.

   

As I have previously called out, price is the driving factor slowing EV sales in the US. Car dealers are a significant part of that price driven slow down as well as a separate, almost as negative, factor. Not only do dealer practices such as price gouging (for example via ”market adjustments”) and other tactics like dealer added accessories significantly increase the cost of electric vehicles specifically, but the active obstructionism that a certain volume of car dealers are engaging in is perhaps the second biggest threat to faster adoption of electric and plug-in hybrid vehicles. In my opinion, if the manufacturers are not going to take a more proactive approach, like Ford has tried to by withholding allocations from non-compliant dealerships,  and federal or state governments aren’t going to either, then it is up to consumers to exercise their power, the power of choice (and choose to buy from dealers or manufacturers that don’t engage in these behaviors).  

Of course not all car dealers are being obstructionist, but far too many are. As The Washington Post recently reported, from a survey done by the Sierra Club, 30% of all car dealers said they would not offer an EV for sale even if they had them in stock. Of course, if you recall, in 2022 (when the survey was done) the automotive manufacturing supply chain was still deeply impacted by pandemic induced delays and parts shortages. But as this survey clearly portrays, some dealers from establishment brands are actively trying to prevent shoppers from buying EVs. Thus it is this behavior, combined with soaring interest rates and sometimes eye watering market adjustments, or markup, that are the primary culprits behind slowing EV sales in the US. 

In the Washington Post article, we also see this negative, protectionist dealer behavior being reinforced at the highest levels. In the article, the president and CEO of the National Automobile Dealers Association, Mike Stanton, says that “Dealers have stepped up and done what is needed” and then that the EV transition is moving too quickly and “going too far”. Stanton also says “We’ve got to consider the mainstream market, or bad things are going to happen”. It sounds almost like he’s threatening something. In response to this obstructionism from NADA, I’d like to point out that: 1. It has been 12 years since the first modern “mainstream” EVs went on sale in this country (specifically EVs like the NIssan LEAF). 2. EV’s currently only represent about 8% of the total new vehicle market in the US. 3. Without some kind of massive coordinated effort akin to our landing on the moon, the fastest we could possibly achieve a roughly 50% mark for annual EV sales in the US is 4 - 8 years from now. Thus things are definitely not moving too fast since we are now looking at a generational timeframe for the transition and there has been plenty of time for the establishment manufacturers and their dealer networks to make a transition. There is absolutely no need to slow it down any more. Finally, the “mainstream market” is very much being considered by manufacturers now, as evidenced by the starting prices of the most affordable EVs (with a Tesla Model 3 costing roughly the same as a Corolla, and other EVs like the Chevy Bolt, Nissan LEAF, and VW ID.4 costing far less than the average price of a new vehicle in the US (about $48,000 in August, according to CBS News). 

If car dealers and their national lobbyist groups would invest more of their energy into retraining, retooling and identifying new business models and pathways to success in the face of inevitable transitions, instead of actively resisting it, the better off our domestic auto industry would be. Because the rest of the world does not care about what the US National Automobile Dealers Association or its leadership thinks. The largest auto markets in the world are transitioning to electric vehicles, and doing so quickly. America is lagging behind due to the short sightedness driving vested interests, and it is high time we, as consumers, take action (especially, if no one else will).

What do you think? The next time you are shopping for a new or used car from a dealer, would you consider walking away if they try to gouge you (especially if it is for an EV)? Would you consider investigating why any dealer may elect not to sell EVs in the first place (whether you want one or not)? Please leave your questions or comments below.

Images courtesy of Kia, Hyundai, Ford and Chevrolet.

Justin Hart has owned and driven electric vehicles for over 15 years, including a first generation Nissan LEAF, second generation Chevy Volt, Tesla Model 3, an electric bicycle and most recently a Kia Sorento PHEV. He is also an avid SUP rider, poet, photographer and wine lover. He enjoys taking long EV and PHEV road trips to beautiful and serene places with the people he loves. Follow Justin on Torque News Kia or X for regular electric and hybrid news coverage.

Comments

Murray Gudmundson (not verified)    November 21, 2023 - 1:13AM

Aside from the EV-unfriendly actions mentioned in the article, how about the basic neglect to even display EVs in showrooms and on the lots? It's still very rare to see EV models prominently displayed at dealerships.