Why investing in an electric future is a “now” conversation, and what dealers can do to prepare for spring selling.
The federal government has an ambitious goal: it wants all new light-duty vehicles sold to be zero-emission by 2035, which means dealers will need to have some skin in the game.
Whether the government achieves its goal or not, it is investing in electric vehicle charge points and infrastructure across the country, and offering incentives at the federal level to help boost adoption. At the same time, OEMs are building up their portfolios and consumers are showing increasing signs of interest.
“There’s a groundswell of interest and action being taken from a consumer standpoint; we can see it from the demand on our platform, and it’s a segment of the market that dealers need to be working with their OEMs on to make sure that the right plans are in place, in terms of the pipeline of product that is coming,” said Leanne Kripp, Head of Automotive at Kijiji in an interview with Canadian auto dealer.
Investing in ZEVs is a “now” conversation
In December 2021, Kijiji Autos released a report called Canada’s Green Transport Cities. The study includes a section analyzing electric car cities in Canada that offers a glimpse into the number of electric cars and charge points on the road in select cities.
For example, Toronto has 6,300 EVs on the road and 864 charge points, Montreal has 3,633 EVs and 1,258 charge points, and Vancouver has 6,600 EVs and 483 charge points. The list also includes Calgary (3,000 EVs, 186 chargers), Ottawa/Gatineau (213 EVs, 345 chargers), Edmonton (782 EVs, 102 chargers), and Quebec City (598 EVs, 40 chargers), among others.
At the same time, Kijiji Autos pulled from its own data to identify which cities have the highest number of electric and hybrid cars listed on its platform. Toronto (233 electric cars and 1,213 hybrids), Montreal (375 EVs, 1,063 hybrids), and Ottawa/Gatineau (75 EVs, 254 hybrids) are at the top of the list.
The report provides some insight into the provincial EV situation in Canada, which may prove useful to dealers. However, the overall takeaway should be the importance for dealers to educate consumers on the benefits of electric and hybrid vehicles.
“We can start to see that groundswell—the demand, the additional options that are available today, but we need to continue pushing so that we can get there as quickly as possible, in terms of helping to reduce our carbon emissions,” said Kripp.
In a statement provided to Canadian auto dealer, Federal Minister of Environment and Climate Change Steven Guilbeault said the Government of Canada “is encouraged by new data released by Statistics Canada on January 26, 2022 indicating that, even amidst the COVID-19 pandemic, zero-emission vehicle (ZEVs) sales have grown at a higher pace proportional to internal combustion engine vehicles.”
That data shows new ZEV registrations increased 38.5 per cent during the third quarter of 2021.
That data shows new ZEV registrations increased 38.5 per cent during the third quarter of 2021, compared to the same period in 2020. Within this group, the number of new plug-in hybrid electric vehicles (PHEV) registrations jumped 72.8 per cent, and new battery electric vehicles (BEV) registrations increased 25.7 per cent. New ZEVs comprised 5.4 per cent of new vehicle registrations in Q3 2021, while ZEV registrations in all provinces were up during that period.
The federal government is eyeing the possibility of a mandate on the sale of ZEVs that is sure to impact dealers.
Over the past two months, representatives from across the automotive sector and other key stakeholders entered into discussions with government officials around this topic. Guilbeault said the feedback will be considered before new measures are put forward—but just as the luxury tax appears to be slowly inching towards reality, some form of sales quota could surface in the near future—as it appears to be doing in Quebec (although the regulation is currently in draft form).
These are only a few of the reasons why dealers may need to brush up on their EV sales tactics. And with spring coming along at a leisure pace, now is the time to fine-tune those methods.
Best practices for spring selling
Dave Bare, Dealer Principal at Harris Kia in British Columbia became an EV dealer in the summer of 2017. Getting into the market required working through a few barriers, such as the cost associated with this shift: sending technicians away for training, acquiring special tools, and installing an EV charging system at the dealership, to name a few. But he has not looked back since.
“The biggest thing for us is making sure that our salespeople are trained so they understand how electric cars—not necessarily how they work—but why it would be a good thing for customers,” said Bare. “A lot of the customers that are coming in looking at electric cars are very well educated on them.”
He said many consumers do their research in advance, which is why it is so important for salespeople to embrace training so they can intelligently help the customer on all things EV. This includes maintenance/servicing needs.
“We’re the only ones at the moment that really should be able to service these cars, whereas a gasoline car can be serviced pretty much anywhere,” said Bare. “We just need to leverage that for the time being, and make sure that customers are coming home for service on their electric car.”
The dealers and the manufacturers that you see right now selling more EVs are the ones that have them available.
As for frequently asked questions, Bare said “by far and away” the top inquiry revolves around range. “Range anxiety is a real thing, and that’s all we hear about all the time from customers,” he said.
Those are areas that dealers can easily train and educate their staff on. The more difficult area and the biggest challenge for Bare, in terms of selling EVs, is product: getting enough units to match the demand. “That’s been the case right from the very beginning, and it’s still the case today,” he said.
For Andria Zanchin, Principal & Executive Vice President of Zanchin Automotive Group in Ontario, the more options that are available to consumers, the more EVs dealers will sell.
“It’s almost like, if you build it, they will come,” said Zanchin. “The dealers and the manufacturers that you see right now selling more EVs are the ones that have them available.”
As an example, Zanchin notes that EV sales are close to 30-35 per cent at their Toyota store, while at other stores that number might be lower—around 1-2 per cent, depending on what the OEM is offering and unit availability. In general across the group, she said the number is probably closer to 4-4.5 per cent of EV sales.
That availability currently depends on the OEM lineup and also the pandemic situation, such as the microchip shortage and the logistics around everything COVID. But Zanchin is optimistic.
“I don’t see it staying that way. I think if we had the units, probably by 2030 we will get closer to 15 per cent or 20 per cent across the board, because people are open to it; they want it right now. They want a change,” she said.
Consumers may have done their research in advance, but they still want to know what the savings look like.
So while Zanchin waits for more units to arrive, they are prepared to answer any and all questions the consumer may have, including around the cost of ownership—which she said is a big one. Consumers may have done their research in advance, but they still want to know what the savings look like.
“What is this going to cost me? Yes, I want to do something good for the environment, but am I going to save some money while doing it?” said Zanchin. “They want to know that, if they’re going to be spending sometimes $2,000 to $3,000 more for that unit, why should they purchase it and what would they be getting for their money?”
As dealers wait for supply issues to be resolved, OEMs are preparing to launch more models and variants within the next few years. As they do, consumer interest is likely to increase. But for dealers still pondering how deeply they should step into the game, it may depend more heavily on what new EVs your OEM has to offer.