Summary
- Car dealerships are optimistic about the return of President Donald Trump, with 64% expecting a positive effect on their business
- Dealerships are unhappy about selling EVs due to low customer interest, longer wait times for them to sell, and high maintenance costs
- Dealerships make half of their profits from servicing vehicles, which are reduced with EVs due to fewer failure points and less maintenance required
- EV customers are seen as undesirable due to the limited profit potential on sales and warranty visits required for small issues
- Dealerships are excited about the rollback of emissions standards, but concerned about proposed tariffs which could have a negative impact on their business.
Article
Car Dealerships Excited for Return of Trump Administration
Car dealerships are optimistic about the return of President Donald Trump, with 64% of surveyed dealerships anticipating a positive impact on their business. They are particularly enthusiastic about the rollback of federal emissions standards, as they have often struggled with selling EVs, which have resulted in lost profits due to lack of customer interest.
Challenges Faced by Dealerships in Selling EVs
Dealerships have faced challenges in selling EVs, with 65% of dealers reporting that customers are not interested in the EVs on their lots. Meeting aggressive EV goals has been deemed unrealistic by a group of 4,700 dealers who argue that tax incentives, charging infrastructure, and consumer demand are insufficient. EVs tend to sit on lots longer, and dealer profits are impacted by the lack of customer demand for these vehicles.
Dealership Incentives vs. EV Sales
Dealerships have financial incentives that may conflict with selling EVs, as they derive about half of their profits from servicing vehicles. EVs have fewer maintenance requirements, reducing opportunities for customer-paid work. Additionally, EVs have longer warranties on batteries and powertrains, resulting in lower profits for dealerships on warranty claims. Despite smaller problems common with EVs, dealer technicians invest significant hours for minimal payoff.
Challenges with EV Customers
Dealerships find EV customers challenging to sell to due to the lack of profitability on the initial sale, frequent warranty issues, and minimal opportunity for out-of-warranty profit. EV ownership may not align with the dealership’s preferred customer base, making it less appealing for them to promote these vehicles.
Impact of Emissions Standards Rollback
Dealerships are looking forward to the rollback of emissions standards as it would reduce the pressure on automakers to ramp up EV production. This would allow dealerships to focus on maximizing profits from internal combustion vehicles while waiting for more profitable and desirable EV models to hit the market. The opposition to EVs from dealerships may hinder the electrification of the fleet if they are not aligned with selling these vehicles.
Concerns Over Proposed Tariffs
Dealerships are concerned about Trump’s proposed tariffs, as it could lead to an increase in vehicle prices by $3,000 on average. This exposure to tariffs from vehicles imported from Mexico or Canada could have a negative impact on their business. Despite these concerns, dealerships overall remain supportive of the administration. They prioritize selling profitable vehicles and are wary of changes that may affect their current business model.
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