The shift to EV sales raises other concerns for dealers, who worry it may open the door to further changes in the franchised dealer model. Some states are allowing EV startups to sell directly to customers. So far, legacy automakers have not been included in those exemptions.
Tesla CEO Elon Musk offers a cautionary tale. Breaking all the rules on sales, service and marketing has worked well for the automaker. Just as legacy brands are trying to catch up to Tesla on battery technology and automotive software, surely they are studying its sales model.
Some of the initial sales programs for EVs at legacy automakers are different from gasoline vehicles and could impact dealer revenue beyond service.
Although in the early stages, some automakers are proposing greater control over electric inventory and floorplan.
Volvo outlined a strategy this year to deliver customer-ordered vehicles to dealerships rather than having retailers order and carry the inventory on their floorplan.
General Motors, via Chevrolet, is considering a pilot of regional hubs for the 2022 Bolt EV and Bolt EUV later this year.
In the case of GMC's upcoming Hummer EV, the company has said it would pick up floorplan costs. For some dealers, however, floorplan has become a profit center since manufacturer credits to dealers for inventory needs can be greater than actual floorplanning costs when interest rates are low and vehicles turn quickly.
Lanzavecchia, who has signed up for the Hummer program, said strong demand for the big EVs lends itself to a nontraditional approach to inventory management, because the vehicles coming to the dealership from the factory will be quickly delivered to customers on a waiting list.
"There's been some very innovative approaches on the launch of Hummer that may or may not be as appropriate once supply and demand reach a more equilibrium state. That might require an update back to more traditional approaches," he said.
That's where strong communication and factory flexibility come into play to defuse tensions created by the new programs around EVs, digital retail, facility requirements or whatever the worry of the day is for retailers.
"I think the best OEMs really look for that retail perspective," Lanzavecchia said.
"Not that they always agree with our guidance. But they oftentimes will accommodate input and make an update that addresses our position."
Dealers have long grappled with the costs of keeping up in an evolving industry while saddled with facilities upgrades and other manufacturer demands, said Jesse Stopnitzky, partner at Performance Brokerage Services, an Irvine, Calif., buy-sell advisory.
With larger groups eager to consolidate, more franchisees are opting to sell their business now rather than make big investments into an uncertain future of electric vehicles and digital retailing.
"Similar to the pandemic, rather than ride this out, to see what the industry will look like on the other side, many dealers are electing to take advantage of the strong market conditions and cash out on higher valuations," Stopnitzky said. "For those dealers who were already considering retirement, these changes to the industry are only accelerating their exit plans."
Urvaksh Karkaria, Hannah Lutz and Jack Walsworth contributed to this report.