Nearly two thirds of US car dealers are pessimistic about the EV transition and its effect on their business, according to a new report from dealer software firm CDK which surveyed 250 national dealerships.
Overall, more than three out of five dealers (65pc) said they were "somewhat" (36pc) or "very pessimistic" (29pc) about the future of EVs when it came to the health of their business, the report says.
The research finds a healthy proportion of dealers across the country are currently preparing to sell EVs, albeit it is a disproportionately low number compared to the amount of dealers which represent EV-making brands. Only 59pc said they have "started or completed transitioning to selling EVs", whereas 89pc of respondents to the survey are dealers representing brands that sell EVs.
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As with the broader EV market, dealer attitudes vary greatly based on location — 23pc of dealers in the Pacific region, comprising California, Oregon, and Washington, say that customers at their stores are "interested or extremely interested" in EVs. At the other end of the spectrum, the Mid-Atlantic, West South Central, and Mountain (MT, ID, CO, NM, NV, UT, WY, AZ) regions, all had zero dealers reporting this level of customer interest. The national proportion of dealers reporting high or extremely high interest is 7pc, the report says.
But the question of whether dealers are optimistic about their own business as the EV transition takes place is a different question to whether, or when, EVs will become the dominant sales channel in the US automotive industry.
Indeed, 45pc of respondents say that they envision EV reaching half of all new sales in the next fifteen years, a higher proportion than those who are optimistic about how their businesses will fare under the transition. And while 25pc of dealers say they do not envision EVs reaching half of new sales for "several decades", this is actually a lower proportion than the 31pc of dealers currently making no effort to sell EVs.
These disparities suggest that, rather than a blanket pessimism about EV adoption, dealers are instead concerned with how their industry fits into an increasingly online direct sales model favoured by many EV start-ups. Indeed, in January, a coalition of US car dealers wrote to President Biden to urge the administration to reconsider its EV incentive regime amid what the group described as a "surging" supply of unsold BEVs.
As such, dealer attitudes towards EVs compared to traditional ICE vehicles ought to be taken with a pinch of salt. Many EV start-ups have opted for direct sales models which exclude dealers altogether. Chiefly, EV leader Tesla, which sold 55pc of all EVs in the US in 2023, sells all its vehicles from its own website. Fellow US EV pure plays Rivian and Lucid also follow this sales model.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
