Dealers certainly make less profit on EVs. The Dealer model was built around regular, required maintenance schedules as profit centers. EVs have far fewer moving parts and fluids with regular maintenance schedules.
Dealers are incentivized to sell more ICE than EVs for the good of their own profits. Ford and GM unfortunately can't cannibalize their relationship with dealers under current American regulations and so will feel a lot of pressure to somehow keep EVs "luxury" and low volume/high margin deals for the dealers so they feel less bad about the loss of maintenance profits.
At one point Ford was teasing building their EV division as a mini-startup with direct-to-consumer sales and no pressure to meet dealer needs/demands, because that would be the only true way to compete with Tesla and Rivian and others. That probably would have been the best interest for Ford EVs, but obviously just floating those rumors was enough to stop it by the number of dealers that are also shareholders in Ford. (A problem for Ford all the way back to Ford v. Dodge Brothers.)
>Dealers certainly make less profit on EVs. The Dealer model was built around regular, required maintenance schedules as profit centers. EVs have far fewer moving parts and fluids with regular maintenance schedules.
Is there any data out there on what percentage of new car buyers take their vehicle to the dealer for maintenance? I've found myself in a position where I can't do my own maintenance for the first time in many years, and after waiting 3 hours for an oil change 3 different time at 3 different dealers I doubt I'll ever hand my keys to a dealer service department ever again for any non-warranty work. And this is on top of their extortionate pricing.
I drive a hybrid with a weird size/shape 12V battery. (It uses the traction battery for starting, so only needs a smaller 12V for e.g. accessories and simple bootstrapping of electronics.) Though I normally do my own maintenance at this scale, when it went bad I went to the dealer because they both had the right battery and didn't charge much more than parts. Plus drove me home after dropoff, and drove me back there when it was done (a few hours later? fuzzy memory), at no extra cost.
I don't have actual statistics, but some factors I can think of:
- New car leases sometimes require dealership-only maintenance.
- Car warranties sometimes imply upcharges may be allowed (such as labor fees) during warranty services if non-warranty maintenance wasn't handled by the dealership.
- New cars sometimes come with discount plans or service subscriptions for maintenance at the dealership.
- Maintenance at a single dealership still sometimes gets reflected in resale value, including trade-ins to that dealership and also some people and auctions will pay a small premium for "single owner, dealer maintained" cars.
Yeah, dealers are an interesting experience at times, but there's an interesting web of reasons that people still use those services.
When your entire supply chain is optimized in ICE vehicles, it’s a tough sell to re-org everything for EVs. And when you try to half-ass it, it doesn’t pan out well, and you end up in this situation.
So you're saying they make _less_ profit on the EVs? That seems dubious.
> They believe that they can somehow retain all of the sales of the existing ICE model while adding growth sales of a different electric model.
Well.. precisely. Isn't the solution to make the EVs more profitable than the ICEs? Meanwhile Toyota's out here killing it in Hybrids.