Volvo Cars will launch a new battery-powered model each year as it strives toward becoming an electric-only car maker globally by 2030. The Swedish automaker has pivoted to an online-first sales model for its EVs and was considering a new distribution model pre-pandemic.
At NADA, the Swedish automaker's U.S. dealers will want to hear what that ambitious electrification strategy will mean for their bottom line.
It's still early in the EV revolution, but the new technology is already disrupting the retail side of the business. Automakers are turning to their retailers to help offset the sky-high development cost of these next-generation vehicles.
But Cox Automotive senior director of new-vehicle solutions Brian Finkelmeyer said automaker margins are 30 percent lower on EVs than on combustion engine vehicles. And pricing controls and online channels erode dealerships' power to influence EV sales margins.
Volvo Retail Advisory Board Chairman Ernie Norcross said maintaining dealer profitability in a BEV-only lineup is a concern.
"We're told R&D costs are higher for BEVs and dealers must share by giving up some profits," said Norcross told Automotive News. "But as the retail advisory board, our job is to protect the network in any margin conversation."