By Eric Anderson, co-Founder and Senior Strategist, SE2
Elon Musk might be the face of the electric vehicle business for now, but the days of Tesla’s EV dominance are numbered. Even with Musk’s cult-like following of affluent early adopters, the reality is that most consumers won’t ever buy a Tesla.
Automotive brand loyalty is a powerful force in America — just talk to a Chevy owner or a Ford family. Consumers want vehicles with familiar features that look like the ones they’re replacing. It’s hard to imagine Tesla’s comically impractical pickup prototype on a construction site, farm, or ranch. And considering the delays plaguing the Tesla Cybertruck launch, competitors have a chance to gain market share.
Some have called Rivian the next Tesla, but the new manufacturer is producing just two vehicles per day. Ford, on the other hand, is waiting in the wings with the F-150 Lightning, the electric version of America’s most popular vehicle.
With the help of a massive network of dealerships and established global automobile manufacturers that know how to reliably deliver high volumes of quality vehicles, America’s electric vehicle future might be closer than originally thought.
Opportunities for Dealerships
The direct-to-consumer sales model favored by EV companies like Tesla and Rivian has a downside. In bypassing the nation’s network of roughly 17,700 new-car dealerships, the model ignores the unrivaled local experts at selling cars.
Dealerships have deep roots in the diverse communities they serve that often go back generations. They understand that buying a car is the biggest purchase many consumers will make aside from buying a home, and they know how to optimize and demystify the purchasing experience. As legacy brands enter the EV space, dealerships can (and should) lead the transition to electric.
How fast the U.S. will transition to electric may have been greatly exaggerated, but EVs will eventually become the dominant car type. Dealerships will need to invest time and money to be prepared when the tipping point arrives. They’ll also need to take a leading role in preparing consumers. Here’s what that should look like:
1. Provide electric vehicle options from the automotive brands that consumers know and trust.
The climate change conversation has helped fuel demand for electric vehicles. Today, two-thirds of consumers are interested in EVs. Legacy brands are rapidly gearing up to meet that demand: Major carmakers have pledged to meet ambitious EV development goals in the coming years.
Savvy dealers should take an active role in getting consumers excited about what the future holds. Again, dealerships intimately understand consumer preferences and what obstacles stand in the way of car buying. By helping customers envision an electric future that includes familiar brands and models, they can ease the stress of the decision-making process and ensure that consumers feel comfortable with their first EVs.
2. Encourage consumers and work with legacy manufacturers to build the EV infrastructure.
As of 2021, the EV charging infrastructure is still in its early stages, but the pace of development could soon increase.
The private sector will ultimately play the dominant role in deciding whether the government’s ambitious goals regarding climate change and electric vehicles come to fruition. As government money stimulates private sector investment in EVs, dealers must work to reassure naysayers that the legacy auto industry is more than capable of bringing this reality to their communities.
3. Remind consumers not to take a risk with unreliable, untested automotive brands.
As with any new technology, the rise of electric vehicles has been accompanied by a healthy dose of skepticism. In addition to the electric car charging infrastructure problem and a lack of vehicle availability, consumers have concerns about higher upfront costs, safety, vehicle ranges, and quality.
The average American vehicle is over 11 years old. Why? Because legacy brands continue to improve the quality and reliability of their models. Dealerships must remind consumers why these brands continue to succeed: because they’ve proven themselves and earned the trust of consumers. Taking a risk on new technology might be fun when it comes to phones and laptops. But when it comes to purchasing from an electric car business, the cost of making the wrong choice can be catastrophic.
American automotive dealers continue to thrive because they invest wisely in their businesses and keenly understand consumer preferences. They’re ready for the electric vehicle movement, and they will help decide whether this is an evolution or revolution among the driving public.