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From Tesla exec. to the auction block—how one startup is turning a dealer pain point into a profit center
Featuring Jimmy Douglas, CEO of Plug
Welcome to another edition of the Car Dealership Guy Podcast Recap newsletter.
Today’s guest is Jimmy Douglas, founder of Plug and former head of used cars at Tesla, explains why used EVs are misunderstood, underpriced, and about to take the market by storm (plus, what dealers can do to profit).
1. There’s a major upside in being able to sell used EVs if managed right.
Dealerships are missing out by not having the right used EV transaction partner in place.
“There's about 10 million EVs coming either through trade-ins or off lease over the next five years.”
Finding a partner that can help in the process of receiving those EV trade-ins and liquidating them immediately can be a game-changer.
2. Being around people on the cutting edge can be life-changing.
Jimmy’s most evolutionary shift in the car business was working at Tesla—before starting Plug.
“I saw it as a place where I could be surrounded by people who were infinitely smarter than me—who were sprinting as if the world was depending on the success of their mission.”
“I thought to myself, if anything is going to set me up to be the most capable version of myself, either as an executive or hopefully as a founder, this was the one.”
Interfacing with disruptive innovators gives you an entirely different perspective on what it takes to win and at what cost.
3. Great innovation grows out of seeing a problem that is ignored or misunderstood.
Jimmy knew that the secondary EV market was being misunderstood.
“They're fundamentally different, but they're being bought and sold just like a combustion vehicle, when the reality is we are going deeper and deeper into the world of the software-defined and battery-defined vehicle and the byproduct of these vehicles.”
The valuation of used EVs and processes for evaluating their value are different from an ICE vehicle.
4. It starts with thinking differently about EVs overall.
Understanding the value of a used EV starts with understanding the value of a new electric vehicle.
“It's my belief that when you buy an EV, half the product you're buying is not the car. It's the charging network, the DC Fast Charging Network.”
In the last three years, the number of DC fast charging stalls in the United States has grown 140%. There's 52,000 of them now—so it could be argued that most EVs…today are more useful, more practical than they were three years ago.
1. Copart – Are you looking to expand your dealership’s wholesale inventory? Finding front-line ready vehicles from finance, fleet, and rental consignors is now easier than ever. Copart Select gives you transparency that drives profitability and the assurance you need. Register as a member to get started at copart.com/doRegistration.
2. Podium - With Podium’s AI BDC, dealerships are seeing an 80% increase in after-hours appointments by handling leads 24/7. Instantly respond to inquiries, book test drives, and let your team focus on what matters: closing deals. Learn how Podium can help you sell more cars at podium.com/car-dealership-guy
3. Plug – The only wholesale auction built for EV’s, making used EV buying fast, transparent, and profitable. If your dealership is taking EV trade-ins you need to check out plug.vin.
5. Assessing the problem.
The biggest issue is that mega companies are already capitalizing on the used EV market.
“If you look at the three top nationwide retailers, they are selling 22% of all used EVs. We're talking about Carvana, CarMax, and Tesla. It's as many as the next top 300 dealers, combined.”
That means 59% of dealers don’t touch used EVs at all— acquiring used EVs because of a previous bad transaction experience with the vehicles.
6. Valuating used EVs can be challenging.
The key to assessing the true value of a used electric vehicle is understanding that “an EV is not a Honda Accord.”
“There are countless examples of that where they used a VIN decoder and that cannot decipher what is the vehicle today versus what it was when it was brand new, because it's a computer on wheels that’s constantly evolving.”
There's also pricing volatility because EVs are so early in the technology and innovation curve that they get way better and cheaper every year.
7. Your level of success with used EVs is determined by you.
Jimmy is not on a crusade to convince any dealers to do anything that they're not excited to do.
“Some are going all in on the used EV business. Some are either not ready or might not ever get into the used EV business.”
Plug focuses on supporting all dealers regardless of where they might fall in the used EV market.
8. How does it work?
Plug focuses on managing the entire used EV transaction process by evaluating the key aspects of a used EV, from tax credit qualification to battery size.
“Dealers submit a small amount of information to us, just enough for us to determine the value of an EV in our auction.”
“We put a number on the car, and then we put cash behind it so they get the deal done. They sell the new. The vehicle that they're selling, they receive the EV trade-in, and then if they opt into our cash offer, which is the same number, it becomes our car immediately we buy it , and then we sell it in our own auction, and the sales conversion is set.”
It’s a zero-risk EV trade-in proposition.
9. The need for a more robust used EV transaction process will grow.
Most dealers don't sell used EVs, they take trade-ins.
“With the number of EVs we have entering the used market over the next five years. Everyone will need the capability to get their new car deal done when there's an EV trade-in involved.”
Becoming an expert on every used EV is a nearly impossible task if that's not what you do all day, every day.
10. Plug’s business model will be even more robust when dealers are invested.
Jimmy is focused on getting more dealer participation in Plug’s next funding round.
“Dealers should have the opportunity to increase the value of their own position by participating in a marketplace, which also happens to make them lots of money.”
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