Dealer body key to success with EVs, GM says

For many General Motors dealers, becoming certified to sell electric vehicles has required considerable effort and expense with little payoff so far. But as GM invests billions of dollars in a future centered around EVs, executives say that will soon change.

GM's dealer body — in contrast to the retail footprint that Tesla is still building out and that other EV startups will need to establish from scratch — is key to achieving the kind of scale the automaker is targeting with a $20 billion investment in EVs and autonomous vehicles.

Today, though, its only EV in the U.S. is the Chevrolet Bolt.

"Our dealer network is a huge competitive advantage for us, when we get them more than one car," GM President Mark Reuss said at the automaker's EV Day last week. "The dealers will really be excited to sell a core nucleus of products and the brands that have real weight and substance to it."

Fairway Chevrolet in Hazle Township, Pa., sells only three or four Chevrolet Bolts per year. Even though demand for EVs is low in Fairway's rural market between New York City and Philadelphia, "we jumped on board with the Bolt right away," said Al Corazza, general manager. Now the store is ready for more EVs. It has three charging stations on site and allows Bolt customers to use the fast-charging station for free. The store has one master technician who has been trained on EV service and another who can fill in on the basics.

When more EVs arrive, managers say the store will already be ahead.

Some dealers worry that once EVs begin to account for a larger portion of sales, they'll lose fixed operations income and have difficulty finding talent to fill EV technician positions. Income from oil changes, spark plug replacements and other services related to internal-combustion vehicles could plummet if EVs became dominant.

Still, "the small revenue loss of oil changes is not so much a priority as is finding the folks that can work on [an EV] and want to work on it for years for come," said Paul Zimmermann, director of sales for Matick Chevrolet in Redford Township, Mich.

Dealers say GM hasn't explained how the fixed operations business will change and where they will make up potentially lost dollars. But the automaker has launched a 16-member EV dealer advisory board to examine the effect EVs could have on dealer operations, including the service drive.

The advisory board will help GM plan and implement strategies in eight areas, a spokesman said: customer education, showroom experience, purchase experience, charging solutions, fixed operations, digital services, customer support, and training and culture.

GM CEO Mary Barra argues that EVs are an opportunity for dealers' service departments.

"Just think of the complexities," Barra said in a speech at the NADA Show last month. "On every vehicle, there are hundreds of billions of lines of code. The things a vehicle can do today, compared to five years or 10 years ... continues to grow. How our dealers participate in that and how the vehicle gets better ... I think are opportunities."

GM has made a number of major EV investments in recent months. It has committed $3 billion to retool its Detroit-Hamtramck Assembly plant for EV production and formed a $2.3 billion joint venture with LG Chem to mass-produce battery cells in Ohio.

"These are billions of dollars of investment that will enable us to do this at scale," Barry Engle, GM's president of North America, said last month. "And in that environment, a dealer network becomes incredibly important."

Engle doesn't expect GM's sales volume or dealer footprint to change much with EVs. And EV sales will be dependent on geography and market demand.

Engle wants dealers to be as strong and healthy as possible. "If we can increase throughput through our dealers, that would be my first priority," he said.

Of 3,000 U.S. Chevy dealerships, more than 1,300 are Bolt-certified, and they sold only 16,418 Bolts last year, according to the Automotive News Data Center. EV sales make up only a sliver of the market, and just 3 percent of consumers would consider an EV not made by Tesla, according to Cox Automotive.

But "somewhere down the line, this electric thing will take off," said Jim Corazza, dealer principal at Fairway Chevrolet, "and we want to be ready."