Why dealers are pessimistic about EV transition

As the automotive industry shifts towards electric vehicles, dealers are expressing significant concerns about the transition, according to a recent report by CDK Global.

Dealers Face the EV Transition highlighted growing pessimism among dealers regarding the EV market’s impact on their business models with 65 per cent of respondents saying so. Fewer than one in five (19 per cent) were optimistic.

That said, feelings vary depending on where these dealers are located and the markets they serve, the report noted.

“Yet, the EV market is said to be inevitable even as headwinds build. Many challenger brands not named Tesla are hurting. Traditional automakers are seen scaling back or rethinking their EV strategy mid-flight,” the report said. “In this tumultuous atmosphere, dealers serve not as a canary in a coal mine but heralds of an unwelcome truth on the ground.”

Dealers are particularly worried about the high costs associated with EV infrastructure and training as well as the uncertain consumer demand. Over half of the surveyed dealers doubt their ability to achieve profitability with EVs, citing the substantial investment required for charging stations and specialized technician training.

Most (45 per cent) said the industry would be at EV parity, with at least half of all sales being all electric, in five to 15 years, but a quarter (25 per cent) said they don’t see parity taking place for “several decades at least.” The rest (30 per cent) said it would be more than 15 years.

Dealers cite similar reasons as consumers as to why there’s a lack of buy-in on EVs: 62 per cent said range doesn’t meet their needs; 47 per cent said charging is too difficult or takes too long; and 34 per cent cite the high purchase prices.

The report also noted that 60 per cent of dealers feel unprepared for the EV transition, with many fearing a loss of business if they cannot adapt quickly. Despite the industry’s push towards electrification, dealers are hesitant to fully embrace EVs without clearer pathways to financial viability and stronger consumer incentives.

As the automotive landscape evolves, dealers are calling for more support and guidance to navigate the challenges posed by the EV revolution, emphasizing the need for comprehensive strategies to ensure their continued success in a rapidly changing market.