EVs and Expectations
- How to align your retailing processes with the EV driving experience.
- There's two key aspects to prioritize.
Zip. Zoom. Zap! Like it or not, electric vehicles (EVs) are here to stay. According to the hotly anticipated annual Global Automotive Executive Survey from KPMG, between 48% and 52% of new vehicle sales in the good ol’ US of A will be EVs by 2030. Even I’ll admit that 2030 feels like the distant future. However, this quote from the report stood out to me:
“Among other factors, EV adoption in many markets has been constrained by the limited number of models available, especially in the larger vehicle segments. The strong pipeline of new EV model launches in the next 24 months will create more options for consumers.”
– Megumu Komikado, Partner, KPMG in Japan
Nowhere is this more true than in the luxury segment. Mercedes, Audi, Cadillac, GMC, and BMW, to name a few, will see their EV sales volumes increase several times over in the next year or two as their supply and variety of EVs increases.
Furthermore, over the past decade, Tesla has set the customer expectation for the EV buying process. Much like the electric power train, it surprises customers with how modern and smooth it is. So it stands to reason luxury dealerships will need to match or exceed that experience to establish their EV reputations. The critical areas of improvement are in F&I and digital retailing.
In F&I, the best advice I can give to these luxury dealerships is to have their F&I process mimic the EV driving experience – surprisingly fun, engaging, and cutting-edge. What does that mean in practical terms? Presentations and interactions with documentation should be digital, helping to drive engagement and personalization. This would also allow the back office processes post-signatures to go off without a hitch, meaning your customer can walk out the door faster. Having F&I rooted in a digital medium also gives luxury dealerships more flexibility, without losing any control over the process, when completing the deal remotely.
Improving digital retailing across the board is the other cornerstone of meeting existing EV buying expectations. While there has been much emphasis on a completely remote sales process, the executives surveyed in the KPMG report still see customers completing a large percentage of deals in person by 2030. A study conducted by Reynolds and Reynolds revealed consumers agree, which showed only 2.56% of customers actually completed the entire buying process online in 2021. The reality is closer to a hybrid model, even with EVs. With that in mind, luxury dealerships would be wise to put measures in place to ensure each piece of their buying process is just as seamless and approachable online as they are in-store. This consistency between online and in-store is key. It guarantees that as more customers become more comfortable with online retailing, they don’t encounter unfamiliar processes that slow their progress.
Yes, EVs aren’t necessarily going to reach a critical mass of sales at mass-market dealerships (Ford, Chevrolet, Toyota, CDJR, etc.) for a few years. However, it will happen much sooner for luxury dealerships – within the next 10-20 months. The units will move. The demand is there (especially in today’s low inventory environment). For luxury dealerships, upgrading their retailing process to meet the expectations of EV buyers is essential to maximizing the lifetime value of these customers.