Dealers accused of being weak link on EV sales

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Governments point fingers at dealers for lack of EV sales

We will all remember Anne Robinson, the British host of the television show “The Weakest Link” from a few years back. I remember liking the show.   

Robinson had a magnificent, if somewhat mean way of declaring  “You.. are the weakest link. Goodbye” to the contestant that was voted by their team mates as the weakest person on the team.   

Why am I referencing a game show from about a decade ago in a trade magazine for dealers?  Because — at the risk of annoying a number of you — you are viewed as the weakest link in the process of the collective (federal and provincial) government desire to get more zero emission vehicles on the roads of our nation.   

We can all debate whether the promotion of zero emission vehicles is a worthwhile government objective or not, but the reality is that the governments of the nation are pursuing a National Zero Emission Vehicle Strategy for implementation “by 2018” as part of the work under the Pan Canadian Framework on Clean Energy and Climate Change.    

Of that we can be certain.   

What that strategy looks like will largely depend on what measures the collective governments decide to implement towards targets that end up getting set for the penetration of zero emission vehicles.

As an aside, it might be helpful to clarify what is meant by a “zero emission vehicle” in the context of a national strategy and in the context of the existing incentive programs that B.C., Ontario and Quebec have implemented.    

In the case of Quebec, as you may be aware, they are also mandating that manufacturers sell a certain percentage of zero emission vehicles beginning with the 2018 model year, having mostly emulated a California-style zero emission vehicle mandate.    

One would think that zero emission vehicles would be just that, they don’t produce any smog-causing emissions or greenhouse gas (GHG) emissions.   

In the current context these vehicles would be pure battery electric vehicles (BEV) or hydrogen fuel cell electric vehicles (FCEV). In both cases, operating the vehicle results in zero smog-causing or GHG emissions.   

Plug-in hybrid electric vehicles (PHEV) are also considered  a type of zero emission vehicle — eligible for incentives and recognized as making a contribution to the manufacturer’s obligation under Quebec’s mandate.

However, those are not the only vehicles that are provided incentives by the three provinces or considered as zero emission vehicles for the purpose of Quebec’s zero emission vehicle mandate.   

Plug-in hybrid electric vehicles (PHEV) are also considered  a type of zero emission vehicle — eligible for incentives and recognized as making a contribution to the manufacturer’s obligation under Quebec’s mandate.   

That is because these vehicles have a battery-powered drive train and a gasoline engine such that for a number of kilometres the vehicle can operate in pure electric mode before relying on the gasoline engine.   

PHEVs are seen as helpful because they provide electric (zero emission) driving for the normal, shorter distances that most people generally drive as well as alleviating the range anxiety by having a backup gasoline engine that allows the driver to use the vehicle like any gasoline vehicle with the same range between gas fill ups. However, I digress.

The reality is that almost all manufacturers now have at least one PHEV or BEV in their model line-up, and if they don’t now they will soon. 

The stringent 2017-2025 GHG emissions regulations in North America will force manufacturers to electrify more of their models in order to comply with the regulation.   

However, the challenge right now is that for many manufacturers and, ergo, their dealers they only have one or perhaps a couple of models that are “electrified” in some way, and this presents a problem for dealers in terms of how much time, energy, training, and investment a dealership is willing to make for one or two models.    

For some dealers, your manufacturer does not give you a choice, you are required to make the investment in tools, training, charging infrastructure etc. to support zero emission vehicles.   

For other dealers, your manufacturer provides you with the option to become a certified ZEV or EV dealer if you are prepared to make the requisite investment.

The trick in all of this is that it is generally well known that the ZEV sales process is a longer one. The process of selling ZEVs (for purposes going forward I will reference equate ZEV to EV as there are very few hydrogen fuel cell vehicles on the road) is dramatically different and in many circumstances the early adopters of the technology know far more about your electric vehicle than your salespeople do. 

The challenge for dealers selling EVs can be exacerbated by inventory allocation by the manufacturer.   

The trick in all of this is that it is generally well known that the ZEV sales process is a longer one.

As with any new technology there are only so many vehicles to go around, so dealers that have become certified and made the investment may have no EVs on the ground at any given time and the customer will be looking at an order situation.   

This is problematic from a dealer’s perspective because this creates a negative customer service experience.

Also, at this nexus, governments and environmental groups have criticized dealers for trying to encourage the EV purchase intender to consider another fuel efficient model as opposed to waiting for an EV, which may have to be ordered.   

Another factor for dealers related to inventory may well be the fact that you tend to order and purchase what you know will sell.   

The waters still may be a little muddy for you with respect to whether or not ordering and paying for generally expensive electric vehicles makes sense if you have no track-record with respect to the latent consumer demand for these vehicles.   

Presumably nobody wants to risk having costly inventory hanging around for 150 days or more that may end up having to be significantly discounted to move the product.

The lack of availability, the reticence to order EVs for inventory, the perceived “bait and switch” tactics, the lack of salesperson training and the overall lack of enthusiasm and promotion of EVs by dealers has — I would argue wrongly — created the perception that the dealership is the weakest link in the process of increasing the penetration of EVs.

I don’t know your business, you as dealers, certainly do and I’ve perhaps made some assertions in this piece that are dead wrong and reflect my own ignorance.    

However, my point at the end of the day is that the dealer community will need to  be part of the EV solution or the entire industry — and perhaps dealers most acutely — will be living with the problem and disruption caused by zero emission vehicle mandates like Quebec has introduced.

I understand that the Canadian Automobile Dealers Association (CADA) is taking action in this area to get your views and your experiences with respect to zero emission vehicles in a survey that you will see from them shortly. 

You don’t need to listen to me, but I’d encourage you to take the time to respond to it and to get engaged. Hard data is the best tool to present to regulators and naysayers that only see dealers as the problem as opposed to working to play a constructive role as part of the solution to getting more ZEVs on the road.

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