Dealers caught in middle of EV transition, panel says

DETROIT — Legislators across the U.S. are pushing for a transition to EVs while most consumers still don't understand what that will look like day to day. In the middle of it all are dealers.

Diane Maher, COO of Fox Motors in Michigan, said her dealers have been put "on the front lines" of the EV transition; some feel like they are playing catch-up to fulfill that role. Many consumers have looked to dealers to help them fill in their gaps of knowledge and preparation, Maher said Tuesday during a Future of Automotive Retail panel at the Automotive News Congress.

For example, Fox Motors "didn't feel like it was our role to tell a customer what they need to do for their garage" when it came to the installation of home chargers, she said. But "the customers don't know what to do. So we had to adapt at the dealership level to try to become experts on that as well," she said.

Panelist Damon Lester, owner of Lester Automotive Group in Bowie, Md., echoed Maher's concerns. Using an EV every day is not possible without charging infrastructure, he said.

"We urge consumers to ask those types of questions because many are not looking at EV ownership through that lens," he said.

Panelists identified range anxiety, education and regional climate concerns as key barriers to EV adoption. Those barriers present challenges for national policy such as the Inflation Reduction Act, which introduced tax incentives to spur EV adoption sooner rather than later, they said.

Affordability of EVs is another key consumer concern, panelists said. Dealers are at a disadvantage, Lester said, because Elon Musk can push Tesla price cuts through instantly, which is not an option for the dealer body.

His proposed solution is to expand the availability of incentives.

"We are urging some legislators to put a moratorium on the income-based formula for incentives, to make it open again for a certain period of time so that everyone is able to get them," Lester said.

Only consumers who make less than $150,000 and households that make less than $300,000 are eligible for the up to $7,500 tax credit on North American-assembled new EVs.

The use of artificial intelligence in dealerships was another topic that emerged during the discussion. Lester said he has begun to use AI to generate topics and keywords for marketing materials, and Maher said Fox is looking at how to use the technology to optimize audits of F&I transactions.

Amy Mills, executive vice president at Cox Automotive, said their focus has been on using AI to "offload and automate parts of the process that are pain points to consumers or efficiency drains for businesses."

However, there are still "more questions than answers" regarding the full potential of the technology, Mills said, a sentiment the other panelists echoed.

The panelists also discussed consumer data and privacy in the evolution of digital retail technology. Todd Milbury, vice president of industry relations at the National Automobile Dealers Association, said dealers are at the heart of conversations about where and how to best implement digital retail practices.

"Dealers care about data privacy and security deeply because it is their customers, their neighbors," he said.

Milbury also warned against a one-size-fits-all approach to digital retail that might inhibit the independent flexibility of a dealer.

"Dealers are very agile and they are also really good at managing expenses," Milbury said. But "when you build fixed costs into a business because of system mandates, that works against the natural success of a dealership."