Dealers say Biden's EV strategy is too aggressive for U.S. market

Despite federal efforts to fill in charging infrastructure gaps and make electric vehicles cheaper for consumers, U.S. car dealers surveyed by Automotive News say they are worried the Biden administration is forcing the industry to move too far ahead of market demand.

According to responses to the 2024 Dealer Outlook Survey of 208 dealers and dealership managers, nearly 83 percent said the federal government was pushing the industry to move too fast on EVs.

"Our roads and electric grid, let alone consumers, just aren't ready as fast as the current administration wants," one respondent wrote.

"The market should be driving sales of EVs, not the government," another said.

A top concern was the EPA's proposed limits on vehicle tailpipe pollution for 2027-32 model-year cars and light trucks — a regulatory move that, if finalized, could result in battery-electric vehicles making up two-thirds of new-vehicle sales by 2032, according to the agency's projections.

Thousands of dealerships have urged President Joe Biden to reconsider the proposal — which could be finalized as soon as March — arguing it would mandate an unrealistic shift to solely battery-powered vehicles before the market and infrastructure are ready.

"Electric vehicles are exciting. They're definitely overall a good impact for our customers and for the environment, but it's moving too fast," said Michael Lucki, general manager of Riverhead Mazda in New York. "It should be driven by consumer demand, and consumer demand isn't there yet."

Most of the surveyed dealers — nearly 55 percent — said EVs weren't generating customer interest or sales at their stores, with some citing affordability concerns or a lack of inventory.

"EVs are definitely not a want of our guests today. Who's going to pay that kind of money for that type of vehicle when the infrastructure isn't available?" said Mike Aus, dealer principal of Durango Motor Co., which sells Ford, Lincoln, Kia and Toyota vehicles in Colorado. "Until the prices of them come in line with normalcy, they're going to continue to sit there."

Dealer April Ancira said her stores sold as few as zero and as many as two solely battery-powered vehicles in December.

"That is less than 1 percent of total sales," said Ancira, vice president of Ancira Auto Group, which retails Buick, GMC, Chevrolet, Ford, Volkswagen and other brands throughout Texas. "There is just very little demand."

Richard Lupo, fixed operations director of Apple Tree Acura and Apple Tree Honda stores in Fletcher, N.C., said in some cases, dealers just weren't meeting EV buyers' expectations.

"It's not [a] range issue or technology issues," he argued. "Based on our experience, it's been the ability of the selling dealer to provide good service on that EV and meet the expectations of the early adopter to that technology, and it seems like that's where it's fallen short."

Provisions in the Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022 seek to address concerns related to EV infrastructure and cost. For instance, as of Jan. 1 this year, consumers can receive tax credits for eligible new and used EV purchases at the point of sale.

However, some dealers pointed to the credits' strict eligibility rules that limit access to the incentive and, therefore, lessen its impact on EV sales.

"At first, the program sounded more appealing ... until I read on about how many vehicles it would exclude because of where certain parts were made," Ancira said of the Section 30D tax credit for new EVs, which includes restrictions on sticker price, buyer income and battery sourcing. "I think it will actually do nothing."

Several dealership executives, including Ancira and Lupo, told Automotive News the focus should be on more affordable hybrid and plug-in hybrids — an easier sell to consumers who have range anxiety or limited access to reliable charging.

"Personally, I think hybrid is by far the best solution because the customer can still get their 30 to 40 miles a day electric, and yet when they want to drive to Chicago or Denver, they can head out and get 400 miles on gas," said Brian Hamilton, who co-owns several dealerships in Nebraska, including Beardmore Chevrolet and Midway Chrysler-Dodge-Jeep-Ram.

Still, those surveyed in January said they had taken steps to prepare their dealerships to sell EVs, with most installing chargers as well as hiring and training technicians to service EVs.

However, those actions come with hefty price tags — with some dealers spending more than $1 million — and sluggish EV demand has left them wondering whether they will reap the benefits.

"After considering the total cost of purchasing and installing charging equipment, upgrading the electrical grid, training staff and meeting the OEM equipment requirements, it seems unlikely that we will see a return on our investment," one respondent wrote.

Kyle Nyswonger, general manager of Carl Burger Dodge-Chrysler-Jeep-Ram World in La Mesa, Calif., said his store had spent "almost $350,000 ... between the chargers, the installation and the transformer."

Most survey respondents — about 62 percent — also said the Biden administration negatively affected their businesses last year, citing inflation and high interest rates as hindrances.

However, dealers had mixed views about the upcoming presidential election — a race that could once again pit Biden against former President Donald Trump — with about one-third of respondents saying they were unsure how it would affect auto retail.

"We work every single day with customers finding solutions to their needs," said Lucki, of Riverhead Mazda. "As long as we focus on the customer and we have a product that they're looking for, and we realize that automotive retail is here to stay ... the administration is just something that comes and goes."