Exposing The Future of EVs in America

Welcome to another episode of the Car Dealership Guy Podcast.

Today’s guest is David Thomas, Director of Content Marketing at CDK Global. In this episode, David shares practical insights into what the electric vehicle experience is like for both consumers and dealers.

David has been covering the automotive sector for more than two decades, working at high-profile publications such as AutoBlog and Cars.com. He has also worked on the manufacturing side, with automakers such as Nissan and Harley-Davidson.

Now with CDK Global, much of his time is spent researching the EV sector, making him a perfect fit to discuss this emerging market.

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(1:54) - David’s career and background

(6:23) - The state of the car market

(11:17) - Where are we at today with how “easy” it is for consumers to buy a car?

(16:58) - What’s the state of EVs in the market?

(33:22) - If you had to place your bet on one automaker to win the EV strategy, who would it be?

(36:17) - What are you seeing as best practices for EV servicing?

(41:56) - What’s your opinion on the possibility of cheap EVs coming in from China?

(50:40) - What’s your short-term outlook for EVs?

1. The EV market is evolving.

Electric vehicles have been around for a long time. David recalls writing about EVs as far back as the 2008 recession, when skyrocketing gas prices pushed automakers to find innovative solutions. Ground-breaking models such as the Chevy Volt and Nissan Leaf would debut soon after, both quickly becoming smash hits. But while EVs are certainly nothing new, the market is starting to evolve at a faster pace.

2. Buying a vehicle is getting easier.

Eighty-seven percent of consumers surveyed by CDK Global last month confirmed it was less difficult to buy a vehicle this year. Meanwhile, price and trade negotiations, normally major headaches, were less difficult, pushing satisfaction scores in these areas past the 60% mark. David notes that while certain issues like long wait times continue to disappoint customers, most are happier than they were before.

3. An electric car buyer is a happy buyer. 

EV owners love their cars. Over 80% of electric vehicle buyers have already recommended a plug-in model to their friends and family members. Another 73% say they will only shop electric moving forward. That number is especially important. If around 2.6 million EVs were purchased within the last two years, that means that roughly 2 million customers will be coming back in the next three-to-five years (average time-span between car purchases) to buy an eco-friendly car. That number is only going to grow as time moves on.

4. Whether someone will be happy with their EV purchase boils down to two things.

• Do they own a garage that can support a Level 2 charger?

• Do they own a second (non-electric) car?

Consumers that fit both descriptions are overwhelmingly likely to love their EV. The reason? They don’t have to worry about range anxiety. EV ranges have also advanced so far that most owners are only charging their car once every two to three days. As David puts it, “If you meet those two criteria, there’s not a better vehicle than an EV, period.”

5. This only applies to half of all buyers.

While that seems like good news, there is a problem. Only about 50% of consumers match both criteria. This limits the number of people that can drive EVs without worrying about their driving range.

6. Dealers are frustrated with EVs and automakers. 

On the retail side, attitudes about EVs are pretty bleak. According to CDK Global’s “Dealers Face the EV Transition Study,” around 65% of dealers are pessimistic about how these products will affect their businesses, with 75% expecting to take a financial hit on either the front end, back end or both. Unfortunately, automakers aren’t helping. Only 5% of dealers are extremely confident in their OEM’s EV strategy, while 41% have no confidence at all. “There is extreme pessimism,” David observes. “[Automakers] need to focus on their dealers. They’re the ones on the ground selling their EVs.”

7. Location matters when selling EVs. 

Outside of coastal, urbanized areas like California, dealers’ feelings about electrification tend to be more varied. Those in mountainous regions are indifferent at best, while others in rural states such as Louisiana and Oklahoma feel overwhelmingly negative. In Texas, around 90% of dealers say their consumers are not interested in buying an EV, even though the state houses the market’s biggest player, Tesla.

8. Product mix is a big obstacle to EV growth.

Many electric models on the market right now have body-styles that aren’t popular with consumers. “It’s kinda strange that the first Evs on the market are hatchbacks and sedans, when everyone’s buying compact SUVs,” explains David. “Someone needs to get the product mix right and get that compact SUV EV out there.” Until that happens, David expects that most automakers, with some exceptions in the luxury segment, will struggle to find EV buyers.

9. Fixing this will take time: Unfortunately, giving buyers what they want won’t be easy. David notes that it takes roughly five years from when a new model is announced to when it lands on the market, meaning it will take another half decade before the current model mix is phased out. Because of this, dealers expect sales to grow slowly: the estimated timeline for EVs to reach 50% market share is over 15 years. 

10. The EV transition is still inevitable: But whether it happens sooner or later, David is still confident that mass EV adoption is guaranteed, making it crucial for those in the retail automotive sector to take this segment seriously. He urges retailers in all regions to begin investing in EV-related equipment and training over the next several years so that when the market finally matures they can be prepared to serve the new generation of consumers.