http://mashable.com/2014/03/17/tesla-dealers-electric-cars/
It's Not Just Tesla: Why Dealers Are Wary of Electric Cars
By Todd Wasserman [2014/03/17] ...
For a guy who is supposed to be selling electric cars, Mike Kelly isn't a
big fan.
Kelly, a car dealer in Erie, Pa., who also happens to represent his district
in Congress, said in a 2011 hearing on fuel efficiency ratings that he fired
a guy at his Chevy dealership who ordered the electric Volt. Kelly claimed
the Volt sells poorly and is overpriced.
"When you look at this, it makes absolutely no sense," Kelly said during
hearings on government fuel economy ratings last year. "I can stock a Chevy
Cruze, which is about a $17,500 car and turns every 30 to 40 days out of
inventory … or I can have a [$45,763] Volt, which never turns and creates
nothing for me on the lot except interest costs."
Kelly, a Republican member of the House who has sometimes aligned himself
with the Tea Party, may not be representative of all car dealers. But he is
certainly not alone. David Kiley, an analyst with New Roads Media, says car
dealers are often ideologically opposed to electric cars. "You'll find that
many dealers are Republicans, and so have joined the bandwagon of [electric
vehicle] naysayers, which is a popular theme among Republicans," he says.
"That's a real phenomenon."
The push towards EVs is being driven largely by the Obama Administration,
which is requiring automakers to double their aggregate fuel economy by
2025. Putting EVs in the mix is one way to skew the average. Car buyers also
get a federal credit of $7,500 when they purchase an EV.
Even if dealers agree in principle with EVs, they aren't great for the
bottom line. "Dealers want to move metal, plain and simple," Kiley says.
"There is more education and selling required for EVs than gasoline cars. As
long as gasoline remains under $4 a gallon in most of the country, sales of
EVs and plug-ins like the Chevy Volt and Ford C-max Energi are going to have
steep hills to climb — because the infrastructure to support them is still
lagging."
Roger Lanctot, associate director of Strategy Analytics' global automotive
practice, says even in comparatively liberal and environmentally-friendly
countries such as Germany, dealers are skeptical of EVs. "Dealers may not
want to sell them," says Lanctot. "This service business opportunity is
different and dealers may be skeptical." Their wariness is logical: Dealers
have to foot the bill for infrastructure, like charging stations, and need
to spend money training employees — all to sell cars that will provide them
with less income than a combustion-engine model ...
"By selling an EV a dealer may be slitting his own throat," Lanctot says.
This explains why "hundreds of cases have been reported of customers walking
into a Nissan or Chevy dealer to buy a Leaf or Volt, then being aggressively
steered toward a Sentra or Cruze," according to Green Car Reports. (A Tesla
forum outlines more stories of dealers steering customers away from EVs.)
The resistance also helps why dealers in various states — New Jersey being
the latest — have been lobbying their statehouses to evict Tesla dealerships
from the state. Tesla does not work with dealers, but instead sells its cars
directly via its equivalent of an Apple store. Tesla founder Elon Musk has
stated that because EVs require little maintenance, there's no reason for
his company to use the established infrastructure of franchise-owned
dealerships:
Electric cars require much less service than gasoline cars. There are no
oil, spark plug or fuel filter changes, no tune-ups and no smog checks
needed for an electric car. Also, all Tesla Model S vehicles are capable of
over-the-air updates to upgrade the software, just like your phone or
computer, so no visit to the service center is required for that either.
Case closed? Not exactly. Charles Cyrill, a rep for the National Automobile
Dealers Association, notes that Nissan sold more EVs through the traditional
route of dealerships than Tesla managed last year — 22,610 Nissan Leaf EVs,
vs. 18,803 Model S EVs, according to sales data from WardsAuto.
Also, a statement from NADA expresses enthusiasm for EVs:
Franchised new-car dealers are huge advocates of alternative-technology
vehicles, including hybrid, natural gas, plug-in and pure electric battery
vehicles. Ultimately, it's up to car buyers to decide what they want to buy
or lease based on affordability and their transportation needs. Dealers
provide multiple options for sales, service and financing, and that's good
for consumers.
Kelly's position, for one, belies the claim that dealers are "huge
advocates" of EVs. But Lanctot believes that to paint dealers as
unequivocally anti-EVs is false — and that the reality is more nuanced.
"Range extenders" — auxiliary power units that are often standard on
combustion-engine vehicles — offer an opportunity for dealers to provide
maintenance," he says.
Even Teslas requires some basic maintenance that could be lucrative for
dealers. The company advises customers to bring their car in for inspection
every 12,500 miles. Service plans start at $600, and the company claims some
85% of Model S reservation holders in North America live within 50 miles of
a Tesla service station.
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