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EVs Hurt Dealer Income: Carmakers Urged to Help
8 Sep
Summary
- Alternative-fuel vehicles surpassed petrol car sales in August.
- EVs significantly reduce dealer revenue from routine maintenance.
- Automakers may offer dealers higher EV sales incentives.
Automobile dealers are facing an unprecedented challenge as clean mobility, particularly electric vehicles (EVs), begins to dominate sales, impacting their crucial service income. In August, for the first time, sales of alternative-fuel passenger vehicles, encompassing EVs, hybrids, and CNG models, exceeded those of petrol-powered cars. This shift is concerning for dealers, as EVs require substantially less routine maintenance compared to internal combustion engine (ICE) vehicles.
Discussions are underway between the Federation of Automobile Dealers Association (Fada) and carmakers to address this decline in service revenue. Industry executives suggest that manufacturers might consider offering higher sales incentives for EVs to compensate dealerships. The long-term profitability of dealerships heavily relies on servicing and spare parts, a fact highlighted by recent industry reports. As EVs continue to gain market share, proactive strategies are needed to ensure dealer sustainability.
