If you can’t find an electric car, your local car dealer might be the culprit. They don’t want them on their lots and often steer customers away from them.
EVs are hitting a lot of roadblocks on the way up as an innovative new product, and one of the roadblocks right now is that many car dealers simply don’t want to sell them.
Electric Transition At Risk
A recent survey showed that a large number of car dealers in America won’t even stock electric cars, much less sell them. Automakers have poured billions of dollars into EVs at the same time that the government is working to bolster EV infrastructure around the country. Why are car dealers refusing to sell EVs?
The answer lies in the nature of car sales. It’s unlike any other consumer market in America. Most products in America can be bought right from the manufacturer or dozens of retail stores. Before World War II, car sales used to be the same. Consumers bought cars at department stores, directly from the automaker, and sometimes at gas stations.
After World War II, various laws were passed to protect the car dealer from being undercut by automakers. The reason for this is that most dealerships were family businesses and were always at risk of being put out of business by a large company. Many of these new laws prevent automakers from selling to consumers.
Tesla Helps Change the Game
Tesla is the one automaker that has tried to get these laws changed by fighting them in court. The company has won some of these legal battles and compromised in others. Either way, Tesla continues to sell directly to consumers. But most automakers have to sell through franchised car dealers.
The first problem is that salespeople on dealer lots often do not know the ins and outs of EVs. They’re not aware of the different types of charging, and the new features exclusive to EVs, and they may not know about all the incentives that help people afford EVs.
The second problem is that many car dealers simply don’t want to sell EVs. They won’t even offer them on their lots. In 2022, it was revealed that 66% of car dealers did not have a single EV on their lot. About 30% of all dealers surveyed went further by saying they wouldn’t offer an EV even if they could.
EVs Take Longer To Sell
Finally, EV models are taking a lot longer to sell. If a car dealer started the year with a two-month supply of gas and electric vehicles, the supply of gas cars remains the same while the EV supply has doubled. The average gas car takes about an hour in one visit to sell. But EV models often take up to four visits of an hour each as the customer strives to learn about the car.
This is a big cut for salespeople. But EV models also have a smaller profit margin, and car dealerships make most of their profit from services. EV models require less regular maintenance than gas cars, and that too, eats into a car dealer’s profit margin.
In other words, the electric transition may still have several hurdles to overcome before it becomes mainstream.
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