Drivers are interested in electric cars. Dealers dont know how to sell them.
"The big challenge to selling EVs is training" car dealers, Pieter Nota confided over dinner one night during the Munich Auto Show.
Nota, the board member of management at BMW, was talking about the company's network of 348 distributors across the United States. He was speaking with a small group of journalists who had joined him for a Bavarian repast in Munich to celebrate BMW's launch of its first-ever electric SUV and electric sedan.
Nota declined to say how many of the company's new EVs it hopes to sell in their first year. But the power and resources behind them are staggering. BMW will offer a fully electrified vehicle in nearly every one of its segments by 2023, he said. By 2024, BMW will have stopped making internal combustion engines at its main manufacturing plant in Munich. By 2025, it will have invested more than $32 billion in EV research and development.
"We are hitting the market exactly when the time is right," Nota said. "When demand is rising and when charging is making strong progress."
Seated next to Nota was Tom Moloughney, an expert in the field of electric vehicle (EV) adoption and the senior editor of the enthusiast website InsideEVs. Moloughney owned a MINI-E back in 2010, way before EVs were cool. In the following years, he hosted annual barbecues exclusive to his (few) EV-owning neighbors and friends in New Jersey. Soon, he earned a reputation as the guy in Chester Township, N.J., who would let you charge your battery in his driveway if it needed juice.
Moloughney has acquired more than 50 different EV chargers, all currently installed at his home. He spends much of his time visiting such manufacturers as Audi, BMW, Ford, and Porsche, talking with executives about his real-world experience with the good, the bad, and the ugly EVs. Most urgently, he focuses on what he calls the single critical component to the success or failure of any company trying to sell EVs: the folks who are selling them.
"One of the impediments to mass electrification is the fact that dealers are not as informed as they should be," says Moloughney, who is also one of the architects of PlugStar, a program that helps consumers and dealers better understand and use electric vehicles.
The numbers bear out the issue: Pew Research reports that roughly 40% of Americans say they are somewhat likely to seriously consider buying an electric car. Consumer Reports puts that number as high as 71%. Still, actual sales of electric cars account for less than 2% of the market today.
"Selling an electric car [can take] three to four times as long as selling an internal combustion vehicle," Moloughney says. "Salespeople don't hate electric cars, it's just that they're there to make money. So if an EV takes them four times as long to sell, which car do you think they'll try to sell?"
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Moloughney leads roughly 25 dealer classes a year, both online and in small groups at dealerships for "pretty much every established OEM...except maybe Buick." The logic is simple: Educate car dealers upfront about the nuances of owning an electric vehicle so they can speed up their sales process, thereby motivating them to sell more EVs.
There are a few reasons why consumers are hesitant to try out owning a first EV. First, it requires them consumer to change from refueling at a gas station to refueling at home. It forces them to think afresh about commuting and time management. Recently, with the introduction of viable new models from several well-known manufacturers, it may have forced them to consider patronizing a new auto brand.
And let's be honest: Until lately, EVs haven't looked great. "It's a matter of education," says Moloughney, emphasizing that, after rebates, incentives, and tax credits, the cars are generally priced comparably to internal combustion counterparts. "Dealerships will be just as happy selling electric vehicles as they are gas cars," he predicts. "As long as they really understand them-and how to discuss them and how to treat them."
There are certainly plenty of electric vehicles to buy. In 2021 alone, Audi launched the e-Tron GT; BMW debuted the electric iX and i4; Mercedes-Benz launched the EQS sedan, and Cadillac launched the Lyric. (Sales results for those newbies, of course, are to be determined). Rivian, Tesla, Lucid, Ford, Polestar and Rolls-Royce have all announced additional electric vehicles being delivered now or upcoming soon. Sales of Porsche's electric Taycan sedan even surpassed those of the brand-favorite 911. Porsche has delivered 28,640 examples of the Taycan so far this year, compared to 27,972 versions of the 911.
The recent increase in electric options (most well-made and capable) has effectively steepened the learning curve dealers face when tasked with selling them. Salespeople now must familiarize themselves with how to maintain, repair, charge, store, move, and drive each of them-even models from various automakers if they work at a multibrand dealership.
Salespeople must now also address a different buyer. While in years past consumers considering electric vehicles such as the BMW i3 or Tesla Model S tended to be tech-forward, eco-aware first-adopters already well-versed in the nuances of going green, automakers aiming to expand in the market and sell new wares now must appeal to "normal" consumers. That means people who don't have the time-or even less, the inclination-to research EVs on their own: busy moms; workaday commuters; semi-retirees; and even weekend warriors who would rather be out hiking or mountain biking than having to think about which car to buy. Even otherwise EV-oblivious people who soon find themselves in a Tesla as a Hertz rental car may become curious about owning one.
"I haven't seen any OEM that I know of that doesn't feel like this will be a complete conversion over time [from ICE vehicles to EVs]," says Mark LaNeve, the chief business officer of Charge Enterprises. "But the consumer will come along a little bit slower … and the dealers are going to play a very critical role."
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Moloughney says that more than 90% of the dealers he visits are not aware of all of the incentives available for a given EV. It is a complex quagmire to navigate. Trade-in values for and against EVs vary, and layers of federal, state, and regional incentives-in addition to standard tax breaks-must be learned and explained.
For instance, the federal government provides tax credits for new battery electric and plug-in hybrid EVs ranging from $2,500 to $7,500, depending on the capacity of the vehicle's battery. All battery electric vehicles are eligible for the full $7,500, whereas some plug-in hybrids with smaller batteries qualify for a reduced amount. States offer additional benefits. The California Clean Fuel Reward is available to anyone who buys or leases a new electric vehicle with a battery capacity greater than 5 kilowatt hours. The New York State Energy Research and Development Authority provides rebates of up to $2,000 for the purchase or lease of a new eligible plug-in electric vehicle. Some cash-back rebates can be claimed upfront; others must be filed with your accountant during tax season. (Online incentive calculators can help.)
"There is disruption coming on the buy side of this," says Andrew Fox, a Tesla owner and the founder, chief executive officer, and chairman of Charge Enterprises. Based in New York, the company helps carmakers and dealers build the infrastructures needed to support electric vehicles. "It's like when cell phones first came out. Today we are the first generation, like 1G; it's just clunky. This is the first time in the history of the automobile when the dealer has to focus on helping you know where to refill your tank."
Moloughney runs his dealership courses in scheduled three-hour sessions. He addresses such simple matters as how to teach customers to download the mobile phone apps that locate chargers and more complex matters like how inclement weather conditions might affect battery life. He shows salespeople how to talk to consumers who hate going to the gas station but haven't considered the fact that if they owned an EV, they could forever eliminate their need to visit one.
"It's very different than selling a gas car," echoes Jason Savino, the digital operations director for All American Auto Group, a Ford, Mazda, and Subaru dealership in Old Bridge, N.J. Savino noticed while sitting in on a routine training session at his dealership that his sales people needed help to prep for the new $43,000 Ford Mach E. "An EV customer is going to focus on the battery size, how much kilowatts they contain," Savino explains. "If a customer is buying [a Ford] Explorer, they're not going to ask the range of the gas tank, how many miles until you're empty, but for EVs the range is one of the most important things."
Dealers desperately needed additional training to help them understand the very simplest things, such as how to identify what kind of charger a car needs and how to plug in, Savino says. They needed to understand how to monitor battery life during inclement conditions and how to navigate the technology inside the EV.
"Customers want to know things like, 'How much is my electricity bill going to go up if I charge this thing at home?'" Savino says. "That is not something the manufacture like Ford is that good itself at [equipping dealers for] answering."
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When it comes to plugging in, "People's initial instinct is to say, 'That's not for me. Maybe those people will do it, but not me,'" says Moloughney. "We have to get over that hurdle."
He spends more than an hour of class time on a charging "deep drive," outlining the differences between Level 1 and Level 2 chargers and DC Fast Chargers and explaining how to install them in an office or home garage.
"It's about being able to quell the fears of people talking about fires [possibly from complications with the battery pack] and range anxiety, but also to explain charging and the fact that you can take an EV just about anywhere these days," he says. "There is still a lot of misinformation about EVs, and if the dealer can't completely eradicate those concerns, the person is not going to purchase an electric vehicle."
He discusses best practices for salespeople (be sure to always send new customers home with a full charge), leads role-play scenarios, and gives salespeople hang tags for an EV's rear-view mirror that outline every money-saving incentive that car qualifies for-and the final price after those savings have been applied.
"It's like cheating, but having it written down like that, where they can see it, really helps them see the bottom line," he says. The results speak for themselves: Savino says he can't keep a Mach E in his showroom longer than a few days.
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Some manufacturers are working to address the need for additional EV education from a company level.
Shortly before the first customer deliveries of the Taycan commenced in mid-December 2019, Porsche launched specialized internal training for EV sales and service across all of its 193 dealerships. Since then, there have been more than 30 training programs for dealership sales and service professionals, according to Porsche spokesman Marcus Kabel. Topics include explaining the Taycan's battery technology, charging, range management, and exploring the features of the Porsche Connect digital interface; the classes are a mix of in-person, live-remote, and virtual modules that can last from a few hours to several days, Kabel said in an email.
"Each dealership has a minimum of two certified high-voltage technicians," Kabel said. "Multiple web-based and instructor-led courses are required for several certification levels that culminate in the ability to provide complete service for Battery Electric Vehicles."
Based on the Taycan's success at beating the 911 and even the comparable Panamera, which sold roughly 8,000 fewer units nationwide than Taycan, the effort seems to be working well.
Meanwhile, BMW says that with the launch of the electric iX SUV and i4 sports sedan, it will be hosting training sessions and working closely with dealers to ensure that all sales personnel are well versed in key product attributes, product advantages, and competitor comparisons. In an email, BMW spokesman Phil DiIanni said the company's training session topics will be so broad as to include the general benefits of driving electric, information on public and at-home charging, and the more specific intricacies of charging and driving an EV.
Audi "has been training dealers" since its e-Tron electric SUV launched in 2019, Audi spokesman Mark Dahncke said in an email.
"A lot of initial baseline work was done for the launch of the e-Tron two-and-a-half years ago," he said. "The focus for 2022 is now to start getting into how customers need to use their e-Trons and how we can make the right fit in terms of car, charging solution, etcetera."
Ultimately, Savino says, it will take a combination of internal training and coaching help from outside consultants to fully turn dealerships into EV-selling machines. "I just don't think the manufacturers are really ready yet to take on all that training."
So far this year, somebody is doing something right. During the third quarter, the overall new-vehicle market dropped by 13% from the previous period in 2020, according to Cox Automotive. But sales of EVs, hybrids, and plug-in hybrids jumped by more than 60%.
All told, EVs accounted for 10.4% of vehicles sold last quarter in the U.S.-an all-time high.