Dealership Strategies for Embracing Future Tech in The EV Industry
Ishaan Bansal
CTO
Technological advancements and growing consumer demand for sustainable and cost-effective transportation is driving explosive growth in the electric vehicle (EV) industry. Simultaneously, governments around the world are enacting stricter emission regulations and offering subsidies for EV adoption. These developments make way for a green automotive market powered by EVs.
As customers become increasingly aware of EVs and their upcoming trends, automotive dealerships must embrace this shift to provide expert guidance and stay current with the latest information. Dealerships that fail to do so risk falling behind their competitors.
This article provides a strategic roadmap for dealerships to navigate the future of electric vehicles. Specifically, it answers three questions:
- What challenges do automotive dealerships face as EV technology evolves?
- How can automotive dealerships address these challenges within the EV industry?
- What opportunities and obstacles stem from the adoption of new advancements in EV technology?
Challenges in Adapting to EV Industry Evolution
Dealerships struggle to adapt to the evolving EV landscape due to knowledge gaps, changing regulations, and shifting consumer preferences. Nevertheless, ignoring the EV revolution can be detrimental to business.
How can dealerships find balance in adopting these trends? Several key challenges must be addressed first.
Rapid Technological Changes
A lot is happening in the EV industry, with researchers experimenting with innovative materials and tech enthusiasts perfecting emerging technologies. When combined, change is happening at breakneck speeds. EV manufacturers and OEMs regularly introduce updates through Over-the-Air (OTA) technology to keep up with these changes. Older EV models may require a more hands-on approach to implement new technologies. Some dealerships remain hesitant to invest in EVs, as they risk ending up with outdated models that consumers don't want, leading to financial loss.
Moreover, sales and service staff need to stay informed of the latest EV tech trends to effectively educate customers and perform maintenance when needed. This continuous need for training is compounded by the relentless pace of change across the EV ecosystem.
Regulatory Shifts
Governments worldwide are implementing stricter emission standards to combat air pollution and climate change. Many countries like India also have safety regulations like the Automotive Industry Standards (AIS). These standards require the inclusion of specific features for safeguarding passengers and the environment.
Dealerships must stay well-informed of these standards and ensure that the EVs they offer can meet these requirements. More importantly, many governments offer incentives and rebates to encourage the purchase of EVs. These incentives take the form of tax credits, rebates, and even access to priority parking and carpool lanes. Familiarity with these incentives can help dealerships to better market EV models as financially attractive options to potential buyers.
Regulations also extend to EV charging infrastructure and sales warranties, with standards varying across regions. Dealerships need to invest in compliant EV charging infrastructure and know the technical specifications involved.
Consumer Expectations
Modern customers are tech-savvy and value innovation. They expect to have the latest advancements in EV technology. Features like extended battery range, fast charging, and cutting-edge infotainment have become essential for many potential buyers. Also, potential EV buyers today anticipate a seamless and user-friendly experience every step of the way — from the moment they take the wheel to performing routine maintenance.
To meet these demands, dealerships must invest time and money into understanding EV technologies and providing ongoing training for their support staff. Not doing so can cause the dealership to lag behind competitors already willing to offer advanced EV options.
A dealership's ability to showcase the latest features and technologies in this competitive market can mean the difference between a successful sale and a lost opportunity when it comes to meeting consumer expectations. By accepting change in the EV industry, dealerships can help position themselves as knowledgeable and trustworthy partners for the next generation of customers seeking sustainable and eco-friendly options.
Confronting EV Industry Challenges
To tackle these challenges, dealerships need to implement effective strategies that support the flexibility and scalability of the rapidly growing EV ecosystem. Companies like Bolt.Earth offer tools and resources to streamline dealership operations, making it easier to meet and exceed consumer expectations. Bolt.Earth’s go-to-market strategies, alongside its wide range of products like Bolt.Earth Lite and Bolt.Earth Pro can help dealerships align with technological advancements in EVs.
In addition to Bolt.Earth’s solutions, dealerships can apply several strategies to overcome common obstacles that arise.
Collaboration with EV Stakeholders
To stay at the forefront of EV tech and market trends, dealerships should work strategically alongside EV manufacturers, EV advocates, policymakers, and other stakeholders. These different groups have a deeper understanding of the EV landscape, upcoming model releases, changes in battery technology, and anticipated regulatory changes. Dealerships can even collaborate closely with EV manufacturers to gain insights into upcoming changes and adjust their strategies accordingly.
EV manufacturers can also provide in-depth training and educational resources to dealerships. This training can inform dealership staff of the features and their potential impact on driving experience, cost-savings, and more. Armed with this information, dealerships can offer top-notch customer support and service when helping customers select the right EV.
Strategic Inventory Management
Effective inventory management is critical for EV dealerships to ensure they are not stuck with outdated models that no longer attract buyers. Data-driven strategies that incorporate predictive analysis and market research help dealerships make informed inventory decisions. These analytical tools collect and assess consumer preferences, pricing fluctuations, historical sales data, competitor trends, and other relevant factors. By doing so, they accurately predict which EV models are likely to experience high demand.
Bolt.Earth's Vehicle Management System (VMS), for example, is a cloud-based platform for EV dealers to gain insights into each EV's lifecycle. Using this information, they can make informed decisions on inventory, aggregate customer feedback, and generate sales reports to explore new revenue streams.
Dealerships can leverage these tools to minimize risks and optimize inventory to meet shifting demand, ultimately enhancing profitability and efficiency.
Customer Education
Beyond understanding the benefits of EVs and the influence of their features on user experience and the environment, dealerships must also use this information to help customers make wise choices. A proactive approach can help customers settle on a model that aligns with their preferences and values. More importantly, empowering customers with in-depth information builds a lasting relationship with the consumer. Needless to say, a customer-centric approach positions a dealership to stay ahead of its competitors and solidify its reputation as an EV market expert.
Combining these strategies will help dealerships weather the challenges that come with EV adoption while preparing themselves for the evolution of EV technology.
Pros And Cons Of Embracing EV Advancements
Embracing the latest advancements in EV technology presents many advantages for dealerships. However, potential downsides exist that dealerships must be prepared to tackle.
Pros Dealership Opportunities Presented
Increased Sales
Offering a wide range of EVs can attract a broader customer base. Given the current availability of EV models, coupled with upcoming innovations, dealerships have a unique opportunity to carve a niche space for themselves in this competitive market. Early adoption can also establish dealerships as local leaders in the EV industry — ultimately translating into increased sales and revenue.
Improved Reputation
Many EVs boast user-friendly features like extended battery range, faster charging, and revolutionary safety and convenience features. When dealerships offer EVs with these advanced features, it's likely to attract more customers. Also, dealerships can cultivate a positive reputation, customer loyalty, and word-of-mouth referrals, all of which are highly beneficial for any dealership.
Refined Customer Experience
Features like autonomous driving, OTA updates, connectivity features, and personalized infotainment systems improve comfort, safety, and convenience for a better driving experience. Customers value these added benefits, as they make ownership more secure and enjoyable. Dealerships that stay up-to-date with the latest EV tech trends are more likely to attract and retain customer loyalty and patronage.
Potential Disadvantages for Dealerships
Higher Upfront Costs
Dealerships may need to make significant investments to keep up with emerging EV technologies. Specifically, they must allocate resources to train their staff and ensure a comprehensive understanding of new features, which can put a strain on the dealership's budget. Furthermore, to accommodate the latest EVs, dealerships may have to invest in EV charging infrastructure that's compatible with various EV models. The availability of sufficient power can cause concern as well. Finally, regular investments can increase holding costs.
Market Uncertainty
EV dealerships operate in an environment of uncertainty, given rapid EV tech advancements and shifting consumer preferences. To counter these uncertainties, dealerships have to spend time, effort, and money on market research tools to predict which EV technologies are more likely to appeal to consumers and which EV models pose a risky investment. If a dealership invests heavily in a specific technology that appears promising but fails to gain traction, it can result in heavy financial loss.
Inventory Risks
There's always a risk of stocking EV models that appeal to a limited customer base. This could lead to slow-moving inventory and lower return on investment. Also, dealerships must identify the right mix of EV models that can cater to changing consumer requirements.
While embracing EV advancements opens the door to many advantages and opportunities, dealerships should stay informed of the associated challenges and risks to make the best decisions on which EV models to stock.
Current EV Industry Initiatives
The EV industry is in a state of constant evolution, prompting all stakeholders to quickly adapt to these ongoing changes. Automotive dealerships should be familiar with these current and upcoming EV industry initiatives at all times.
Government Action
Governments worldwide are enacting stringent emission standards to encourage consumer EV adoption. In Beijing, for example, obtaining a license plate for traditional internal combustion engine (ICE) vehicles can be a time-consuming and costly process. This requirement has been waived for EVs, however, making them an attractive choice for environmentally conscious Chinese consumers. Similarly, the Indian government also offers incentives like road tax exemption, interest-free loans, and purchase discounts to encourage more people to take the electric route.
EV Manufacturer Commitment
EV manufacturers are rising to the challenge posed by these regulations. Improving battery technology remains a priority as research and development to create EV models that can travel longer distances on a single charge continues. This focus on EV innovation serves to alleviate range anxiety, or the fear of running out of charge while driving. Automakers are also diversifying their offerings, ranging from compact vehicles to electric trucks, to meet the needs of a broad spectrum of customers. The wide variety of models is fueling greater interest among consumers, sparking wider EV adoption.
Expanding EV Charging Infrastructure
To keep up with the surging demand for EVs, charge point operators and EV charging infrastructure owners are building fast-charging networks. In addition to easing range anxiety, these charging points can enhance the overall charging and ownership experience, making EVs even more appealing to potential customers.
Digital Solution Integration
Third-party app developers are building complementary digital services to ensure that advanced EV tech features are intuitive and simple to use. Notably, Bolt.Earth has a well-developed app that accurately displays the nearest charging stations, battery charge status, and important telemetry data. These services support user convenience for making informed decisions.
Due to these efforts, individuals, fleet operators, delivery companies, and other key entities are steadily transitioning to EVs. This trend bodes well for economies and the environment at large. Dealerships can harness the opportunities arising from this concerted effort to boost their profitability and play a vital role in the growth of the EV industry.
EV Industry Expert Opinions
When asked about current and projected EV adoption trends, the CEO of Mercedes India, Santosh Iyer, offers his insight: "When it comes to EV penetration, Europe is at 12%, the U.S. is at 6%, and China is at 22%. These variations are based on market maturity. In India, the mass market is at 1%, while the luxury market is around 5%.”
Notably, this is a promising start. While many ICE vehicles still hold a commanding presence on the road, the automotive industry is witnessing a shift in preference for EVs and their advanced technological features. As a result, dealerships need to be prepared to cater to consumer demand in the future of electric vehicles.
EV Industry Implications for the Future of Electric Vehicles
Looking ahead, the EV industry is set for ongoing growth and innovation, with advancements in battery technology, the emergence of autonomous driving features, and a focus on sustainability. Dealerships that adapt to these changes can be successful, provided they can navigate the associated challenges effectively.
Bolt.Earth plays a pivotal role as a trusted partner for dealerships looking to align with these advancements and boost sales. With unique services and solutions available, Bolt.Earth can streamline dealership operations, maintain keeping inventory status, ensure compatible charging, support vehicle management systems, and more. Bolt.Earth also significantly enhances the efficiency, profitability, and ability of dealerships to meet the ever-evolving demands of the EV industry and provides valuable educational content to help dealers navigate the complex landscape of EVs.
For more information about how dealerships can embrace the EV revolution, please see the FAQ and Resources section below.
FAQs
Why should dealerships incorporate upcoming EV technologies into their offerings?
Staying informed of EV advancements positions dealerships as trusted sources of cutting-edge technology. This attracts tech-savvy customers and those seeking eco-friendly options. Moreover, advanced features like longer battery range, autonomous driving, and sustainability initiatives align with consumer preferences and can lead to increased sales and enhanced customer satisfaction.
What is driving the rapid advancement of EV technology?
Environmental consciousness and the need to reduce greenhouse gas emissions have pushed automakers to invest heavily in EV research and development. Government incentives, such as tax credits and emission regulations, create incentives for manufacturers. Furthermore, consumers are seeking vehicles with longer ranges, advanced features, and lower operating costs, driving innovation in the industry.
How can dealerships prepare for upcoming EV advancements?
Ongoing training ensures staff can effectively communicate the value of EV advancements. Regular inventory updates keep dealerships current with technology, and expanding charging infrastructure attracts more customers. Customer education builds trust and facilitates informed buying decisions, enhancing overall readiness for upcoming advancements.
What are some key trends shaping the EV industry today?
Government incentives and stricter emissions standards are driving global EV expansion. Improved driving range addresses range anxiety, while diverse models cater to a broad consumer base. Rapid charging infrastructure growth enhances convenience. Sustainability efforts focus on eco-friendly materials and reduced carbon footprints in production. These trends are influencing the EV landscape significantly.
What does "future-proofing" mean for dealerships in the EV sector?
"Future-proofing" for dealerships in the EV sector means preparing for upcoming advancements by adopting the latest technology, staying informed about regulatory changes, and ensuring inventory aligns with evolving consumer expectations. This strategy allows dealerships to remain competitive, attract tech-savvy customers, meet changing regulations, and offer advanced features. It involves continuous adaptation to emerging trends to ensure long-term success in the rapidly evolving EV market.
Resources
EY: How electric vehicles are reshaping the car-buying journey
Uncover the impact of EVs on the car-buying journey here.
PNAS: Technology advancement is driving electric vehicle adoption
Explore the adoption of battery electric vehicles (BEV) in the United States here.
McKinsey & Company: How electric vehicles will shape the future
Learn about how new technologies can fuel up the global EV revolution here.
Lincoln Climate-Smart Collaborative: Lincoln Electric Vehicle Readiness Plan
Discover how cities like Lincoln, NE are encouraging dealerships to embrace EVs here.
CBT News: How to Successfully Navigate the Used EV Market
Learn what dealers must do to navigate the used EV market here.
