Electric vehicles (EVs) are quickly becoming the new norm, and service departments need to adapt to this reality. In the first quarter of 2021, battery-only EV sales soared 45% year over year, compared with 11% growth in the overall auto market, according to Cox Automotive.
This trend seems destined to accelerate in the near-term. From Ford’s launch of the F-150 Lightning electric truck, to GM committing to offer 30 new electric vehicles globally by 2025 (the same year Jaguar pledges to go all-electric), automakers across the spectrum are turning hard toward EVs.
For service departments, the clock is ticking. Unless dealerships figure out now how they will position their Fixed Ops departments in this new market, they run the risk of getting blind-sided by a significant loss of service demand (and revenue).
Part of adapting means facing the facts. Lifetime EV maintenance and repairs tend to be around half the cost of that for gas-only cars, finds Consumer Reports. But it’s not all doom and gloom. Service departments can make up some of this revenue gap by excelling at EV-specific maintenance and repairs to retain market share and build customer loyalty.
The 2020 Dealership Service Retention Report
Insights from Nearly 2,000 Dealership Customers
A Range of Services
When it comes to EVs, batteries take center stage. While they may not require as much maintenance as an internal combustion engine, they can still be a source of revenue for service departments.
For one, EV owners tend to care deeply about battery performance. In fact, battery and driving range is the top purchasing decision for EV owners. From there, battery range and accuracy of the displayed range account for around 20% of EV owners’ overall satisfaction, finds a J.D. Power survey.
So, there should be strong demand for maintenance that keeps batteries healthy. Work such as flushing coolants can help keep battery temperatures in check to maintain battery performance. And, making sure brakes are in good working order can also help, as regenerative braking can influence range.
Plus, when batteries do degrade over time or get damaged, they can be costly to repair or replace. While some EV owners may then decide to purchase a new EV that gets better range, service departments may still have a revenue opportunity to fix or replace older batteries.
Everyone Needs Tires
Regardless of what type of vehicle someone drives, everyone still needs quality tires and tire-related services. EV tires eventually wear down and need to be replaced and EV owners will also need services like tire rotation and balancing.
Plus, maintaining optimal tire pressure can help extend driving range. Research from ExxonMobil Chemical, published in SAE International, finds that optimizing tire pressure can improve EV range by 3-7%.
Emphasizing tire-related services can help your dealership win over all types of customers, but it’ll be especially important in getting regular business from EV owners. But dealerships have a lot of ground to make up in this area.
Over two-thirds of all vehicle owners chose a non-dealership location for their last tire replacement, according to DriveSure’s 2020 And 20% of those loyal to dealership service departments are unaware their dealerships sell tires. If dealerships don’t act now to become known for tires and related services, they run the risk of losing out on the most frequently-needed maintenance for EVs.
One way for dealerships to help customers become more aware of tire offerings is through offering tire-related incentives. One of the core benefits of the road-hazard tire protection included in our DriveSure incentives is that whenever a vehicle owner has a flat, their dealership is the first place they think of because they can get the flat fixed for free. And if it turns out that they need the tire replaced, that’s covered too. This helps to associate your dealership with tires in the minds of your customers, rather than the tire shop or big box retailer down the road.
No matter the engine style, accidents still happen and require repairs. The question then is whether drivers will go to a third-party shop or a dealership for body work and related services. Given that many EV models are new, third-party body shops might not have much experience fixing certain vehicles, let alone inspecting important components like the battery. This gives dealerships the opportunity to position themselves as the experts to get EVs back to pristine condition.
Relatedly, all types of cars will still face incidents like breakdowns and flat tires. This is another place that incentive programs like DriveSure can help. DriveSure’s dealer-loyal roadside assistance perk ensures that, if a breakdown does happen in the area, the vehicle gets towed back to your dealership for quality repairs.
Market Your Expertise
Dealerships’ service departments can no longer afford to wait and see what happens with EVs. The future is now, and service departments need to find ways to capture revenue from EV owners.
By marketing your dealership as an expert in EV servicing needs, you can win over customers and build loyalty in this young but rapidly growing market. Focusing on EV owners’ top concerns, such as battery range, along with showcasing your dealership as the go-to place for EV tires, body work and other repairs can help your dealership easily navigate this transition.
The 2020 Dealership Service Retention Report
INSIGHTS FROM NEARLY 2,000 DEALERSHIP CUSTOMERS
Learn why customers choose to return to their dealership for service and why they don’t. Plus, we reveal your biggest opportunities for encouraging customer loyalty.