Electric Car

EV allocations —or lack thereof — could be the sales linchpin for dealers

Sales of zero-emissions vehicles (ZEVs) and hybrids, while still less than four per cent of total new-vehicle registrations in 2020, are influencing dealer operations, participants said during a recent Automotive News Canada Congress panel discussion.

To see the entire panel discussion — and presentations from other speakers — register for on-demand access of the Automotive News Canada Congress Conversations here.

From staffing service departments and training sales staff, to fighting for scarce electric-vehicle allocation, panelists outlined the impact of the transition to an electric future.

ZEV models are proliferating, but there will likely be a “mosaic” of drivetrains — battery electric, hydrogen fuel cell, hybrid, natural gas and, for a time, even internal combustion — that customers will choose from depending on their needs, said Kevin Zimic, dealer principal of Ridgehill Ford in Cambridge, Ont., 100 kilometres west of downtown Toronto.

The mix will depend on whether the customers live in cities or rural areas, where recharging stations may be few and far between, Zimic said.

HTEC CEO Colin Armstrong, whose North Vancouver company builds hydrogen refueling stations, said battery EVs might dominate, but the growth of hydrogen fuel cell use in heavy-duty applications such as ports and warehouses will help bring down the cost for passenger vehicles.

“I think I’m a believer it’s going to be a fairly balanced universe by 2030 and in the light duty,” Armstrong said.

“It’s up to dealers to adapt,” Zimic told the panel, moderated by Automotive News Canada Publisher Tim Dimopoulos. “So we’re going to have to learn as retailers how we’re going to manage that based on what our customers need and what would best service them.”

MORE CHOICE, MORE SALES

Lack of choice has been a limiting factor, said Hugo Jeanson, co-owner and general manager of Bourgeois Chevrolet-Buick-GMC in Rawdon, Que., northeast of Montreal.

But SUV and pickup models are starting to arrive, and automakers are promising more choices in every segment in the next three or four years, he said.

EVs currently make up about half of the annual sales at his store, Jeanson said. Buyers are discovering they’re better overall than the fossil-fueled alternatives, more reliable, yet need less maintenance. That has translated into increased loyalty, notably on the service side.

“So, we have a better retention on the customer side and service, even though there’s a little bit less maintenance,” Jeanson said.

Dealers must prepare to specialize, investing more in training, he said. That includes giving employees plenty of EV seat time and experience commuting and recharging at home.

“The training is very easy,” Jeanson said. “Just put your staff behind the wheel.”

Toyota Canada CEO Larry Hutchinson offered a sober view of the future. The percentage of the population ready to buy an EV is still small, with price the biggest barrier.

“Yeah, there’s other issues,’ he said, noting that Toyota sells more EVs and hybrids than anyone in the world. “There’s anxieties about range and things like that. But cost is a big issue.”

It’s one reason for the continued popularity of hybrids, which make up about 30 per cent of Toyota’s Canadian sales, Hutchinson said. Hybrid technology is the most logical approach to reaching greenhouse-gas-reduction goals in the near term, he said.

REBATES BEAT MANDATES

Incentives rather than sales mandates are the best way for governments to create EV demand, Hutchinson said, citing the experience of other countries.

Federal, Quebec and British Columbia rebates and legislated ZEV sales targets in the two provinces have influenced how automakers direct their limited EV production, the panel heard.

Ford dealer Zimic said he could sell more EVs if he could get them. Ontario scrapped its ZEV rebate program in mid-2018, hammering sales. Statistics Canada reported Ontario 2020 sales of 10,515 registrations, up from 9,762 the previous year but still were well below 2018’s total of 16,365.

Zimic recalled a conversation with a Kelowna, B.C., Ford retailer during a dealer-council conference call. Zimic mentioned that his Cambridge store had been allocated two or three Mustang Mach-Es, which were sold before they arrived. The Kelowna dealer responded that he received 163.

“I would love the opportunity to be able to do that,” Zimic said.

Jeanson, the Quebec dealer, described how he bought up all available Chevrolet Volts in 2015 from as far afield as Ontario and New Brunswick to assure his store got a solid allocation of the new 2016 model. A revised Chevrolet Bolt is due for the 2022 model year, along with a compact-utility version.

“Obviously, every allocation that we have for 2022 is already sold,” Jeanson said.

Building out charging infrastructure is the key to boosting electrification, said Himanshu Sudan, president and co-founder of the Toronto energy management company eCAMION. He pointed to a 2015 Cornell University study that concluded U.S. federal spending on the charging network would lead to more EV sales than funnelling that money into buyer incentives.

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