Whether it's shopping for used cars on OfferUp, or people looking to buy their next vehicle, the automotive industry has seen a global surge in electric vehicle (EV) sales: Europe saw a 60% increase in sales in the fourth quarter, China an 80% increase, and the United States an almost 200% increase from 2020 to 2021.
Increased Demand for EVs requires F&I Innovation
This rapid growth makes it increasingly important for dealers to adjust product offerings to appeal to the growing number of EV owners. By offering various services that make it easy for consumers to switch to electric, dealers can stay ahead of the curve and capitalize on the growing demand for electric cars.
Here are a few ways dealers can tailor services toward EV owners:
1. Continue offering Vehicle Service Contracts (VSCs)
There’s a common misconception that electric vehicles don’t need a service contract. They don’t require oil changes, have fewer mechanical parts, and don’t possess engines or a transmission. However, the purchase of an EV doesn’t automatically remove the need for quality F&I services. EVs just require slightly different services.
Dealers can capitalize on this by offering EV-specific options like extended warranties on the battery, adding emergency charging services to roadside assistance packages, or offering financing on upcoming expenses like tire replacement through a tires-as-a-service subscription.
2. Capitalize on your innovation offerings
EVs are at the precipice of new advancements, increasing opportunities to monetize. One helpful strategy dealers can use is to first consider the largest barriers to entry for EV adoption, then brainstorm innovative solutions to alleviate those concerns. For example,
Charging Infrastructure. McKinsey & Company report “charging issues” as the number one barrier to adopting electric vehicles. Consider partnering with utility companies to offer charging installations with financing options to spread out the total cost over time. While this may be an expensive cost for EV owners upfront, consumers will require charging access to enjoy the full benefits of their EV, and dealer financing options can help offset the initial cost.
Tire Replacement. When it comes to maximizing the peak performance of EVs, proper tire maintenance is key. Dealers could offer tires as a subscription service with discounts or monthly plans that include regular tire maintenance and replacement to help spread out the expense over time.
Other Maintenance Costs. To help customers balance the rising costs of maintenance and repairs over the vehicle’s lifetime, dealers could offer mobile service solutions for at-home repairs to make it easy for customers to get complete servicing at their own homes. Services could include topping off fluids, tire rotations, inspections, and a battery capacity check to help gauge the battery life expectancy.
Next Steps for Dealerships
The demand for products and services tailored specifically to electric vehicles is on the rise and will never go away. In fact, as long-term battery performance improves over the next few years, EVs will ultimately have a longer lifespan, which means more opportunities for servicing by dealers.
Although EVs are predicted to generate 40% less after-market spending over their lifetimes due to having fewer mechanical parts that could break down, the chassis components like EV powertrain and thermal parts as well as tires are expected to create a surge in spending long term. Dealers should focus on extended warranties and service packages geared towards these parts in particular.
Turn Customers into Clients
Cultivating long-lasting relationships beyond the initial sale is a great way to distinguish your dealership from the competition and turn your one-time-purchase customers into loyal clients who repeatedly make purchases from you. Whether it is with a customer or client, all relationships are important to the overall success of your business.
To further help dealers analyze where they can help customers make the conversion to clients, they should frequently assess the current landscape of their industry to ensure they are doing everything they can to provide quality service. With a reduced need for maintenance services, EVs currently pose a valuable question for dealerships: How can we maintain relationships with our EV customers?
Some automotive dealers are already putting ideas into action. BMW has implemented BMW Driver’s School for its owners. Tesla provides their Mobile Service Anywhere program, allowing EV owners to enjoy the benefits of remote diagnostics, over-the-air software updates, and mobile technicians who can meet anywhere. Not only do these services provide necessary maintenance, but they also create an elevated customer experience lasting beyond the initial sale.
Other ways dealers can improve post-sale customer relationships include:
Offering at-home repair and maintenance services
Performing regular inspections with service included (F&I)
Partnering with online EV retailers that don’t have the infrastructure to service their cars themselves
Obtaining an EV certification to become the trusted EV location for sales and service in your community, which will help you gain expertise beyond direct OEM relationships
Dealers can also prioritize equipping their staff with up-to-date industry knowledge on everything related to electric vehicles. 60% of drivers in the U.S. are contemplating purchasing an electric vehicle soon, so dealers need to keep their teams informed on EV trends to meet consumer demands and stay ahead of the competition.
By looking for innovative ways to monetize electric vehicles, dealerships can ensure continued growth and success beyond the initial EV sale. What else will your dealership do to improve maintenance offerings and add additional value to EV clientele?
Verified Dealer Program
OfferUp is here to help. If you are looking to update your digital strategy or want to learn more about the latest EV trends, our team of experts is here for you. Every month, OfferUp has millions of car shoppers buying and selling vehicles and our dealer partners are taking advantage of those learnings. Contact us to find out what you can do and give your dealership a head start in the upcoming EV revolution.