Guest commentary: How dealers can adapt F&I for EV buyers

In a short time, electric vehicles have gone from an emerging trend to an industry disrupter and are now a primary focus for automakers, dealers and consumers. While they remain a relatively small segment of vehicle sales, there is no doubt volume will climb as more investments are made in alternative powertrains, charging infrastructure and overall commitments to more sustainable options in automotive.

Other significant factors at play are consumer demand and adoption, shifting legislation on direct-to-consumer sales and tax breaks for EV sales.

With all these elements to consider, dealers may get swept up in the sheer volume of information and struggle to quantify the implications of the EV trends on their dealership. By focusing on the operations of your dealership and how you can evolve processes to suit EV sales, you can set a clear plan of action.

Though the EV is relatively new to the automotive world, the building blocks to success remain the same. At the heart of that is creating a reliable foundation for building relationships with your customers. Your dealership needs to present intentional, tailored customer service and stellar follow-through. Regardless of the type of vehicle they plan to drive, customers want to know you care about them and want to earn their business. EV shoppers are incredibly knowledgeable about the product they're buying. Product knowledge, both from a vehicle and F&I perspective, will go a long way in establishing reliability with your customers.

Once you establish trust and communication, opening the door to F&I is another element of the value you're adding to the ownership and driving experience. And while the structure of the F&I conversation may not change much for an EV customer, your approach and product offerings should. Just as you sell products for new, used and leased vehicles, having a suite of products designed specifically for EV models is necessary to provide your customers with the coverage and protection that are the trademark of F&I products. Remember, your EV customers are purchasing a vehicle with the relative unknown of how long electric components may last and may want a menu of coverage options for mechanical breakdowns, necessary service and repairs.

Like internal combustion vehicles, EVs present a crucial F&I opportunity for your dealership to find enhanced profitability and create additional touch points to help extend the customer life cycle. To effectively sell F&I products on electric vehicles, it's essential to provide ongoing training to your F&I managers so they remain product experts and can communicate the value to your customers. The principles of active listening to understand the motivations and concerns of your customers are especially relevant for EV buyers in the F&I office.

Historically, a dealership's competition was the other dealers in its market. Today, your competition extends to any dealer, OEM or direct-to-consumer brand with a website or omnichannel presence. EV startups are establishing a foothold in the market as are fully digital companies that capitalize on convenience — a strong motivator for any buyer who prefers a few clicks over hours at a dealership.

With the traditional sales model officially upended and the power fully with the buyer, how do you beat the competition for your customer's attention and business? Look to your people as your differentiator.

Marketing — and delivering on —a full-service, customer-centric operation across multiple channels will take you far and help you compete in an industry where consumer options are limitless. Think about how your website and digital-to-dealership pipeline compares with direct-to-consumer brands and take the necessary steps to ensure you can meet customers where they are.

For dealerships, that means creating a flexible process that enables customers to interact online or in-person at any stage of the buyer's journey, including F&I. Data shows customers still rely heavily on the advice and guidance of F&I managers when it comes to selecting products and understanding their value. Being able to meet customers where they are for those key interactions has proven to be a win-win, whether through digital purchase pathways like websites or more interactive channels such as virtual F&I.

When you think about early adopters of emerging technologies, the buyer profile tends to be more affluent, educated and aligned with technology and environmental impact. It's no surprise EVs are made to stand out and branded as a way of life. These buyers have an expectation of a custom, convenient, efficient path to purchase, and realizing that aim is critical for your dealership. To appeal to customers and win them from the competition, you must prioritize their experience.

To align your digital presence and e-commerce options with modern expectations, work with your team to assess your processes. Ensure your website is up to date and designed for optimum user experience to create a seamless online ordering process that considers every step of the transaction — including F&I. Your F&I provider should evaluate your menu and make recommendations about how to make your products more prominent on your website. The earlier you introduce your F&I products and educate your customers on their value, the more likely you are to improve key metrics like gross profit per vehicle, products per deal and product penetration. Enabling processes like virtual F&I allows you to reach customers anywhere and create a better buying experience.

With several unknowns as far as how EV batteries and components will stand up over time, it's a good idea to evaluate how to build customer retention outside the service drive.

You see existing ICE vehicle owners around three times a year for regular maintenance, which is plenty of opportunity to create loyalty and provide excellent service. If an EV comes in just once a year, you'll need to be more intentional about how you will bring customers back. As EV sales volume grows, you may need to find different avenues to bring in service drive revenue because oil change promotions don't apply.

One way to help ensure customer loyalty is through F&I products. EV components are expensive and with limited data about their lifespan, customers will want to protect those assets and their wallets. Plus, when customers buy an F&I product through your dealership they are more likely to return for service, building the brand loyalty that creates a repeat customer and enables many future sales opportunities.

Dealers will need to adjust their purchasing, repair offerings and sales techniques for EV customers in the service drive. There's no need for immediate concern, and time will tell as electric vehicles age, enter the used-car market and eventually need components repaired and replaced. But it's a good idea to start thinking now about how your operations will need to evolve and train your teams to become trusted service advisers and repair techs for electric vehicles.

Adapting to any change can seem daunting, so it's important to remember the following:

• Being with (and ahead) of the times can position your dealership for future growth, ensure you're poised to hold on to your customer base and earn new business.
• EVs are here to stay — and so is the need to offer a suite of F&I products designed specifically for electric vehicles and their components, and train your team how to effectively present them and conduct the interview with each buyer's unique needs in mind.
• EVs have a higher sticker price and, with their advanced technology, higher repair costs. Educating your customers on the importance of F&I vehicle coverage will help drive long-term retention.

We have reached a tipping point in the automotive industry and our processes need to evolve to stay current. Whether EVs end up being 10 percent or 30 percent of car sales in the next several years, it is a large enough segment of the market that dealers must prepare for the shift.