Poor car dealers. After making record profits in the wake of the pandemic and the collapse of just-in-time inventory chains, they’re now complaining that selling electric vehicles is too hard. Nearly 4,000 dealers from across the United States have sent an open letter to President Joe Biden, calling on the government to slow down its plan to increase EV adoption by 2032.
Despite our robust economy, the US lags behind both Europe and China in EV adoption. More car buyers are opting for all-electric vehicles every year, but even a record 2023 will not see EV adoption reach double-digit percentages.
Recognising that transportation is the largest segment of US carbon emissions and that our car-centric society encourages driving, the US Department of Energy released a proposed rule in April that would change the way the government calculates each automaker’s Corporate Average Fuel Economy. If adopted, the new rule would require OEMs to sell many more electric vehicles to avoid heavy fines. This is on top of an earlier White House target that one in two new cars sold in 2030 should be EVs.
And that’s too ambitious, according to a coalition of car dealers who say new EVs are piling up on their forecourts and they can’t sell them.
The inability of dealers to sell EVs has not gone unnoticed. Over the summer, industry analysts at Cox Auto hit the headlines with data showing that new EV stock is growing.
“EVs are selling at three times the rate of [internal combustion engine] cars. And so dealers who have been forced to invest in the electrification space, who have been forced to have floorplan financing against these cars, are suddenly running against 90-93 days of inventory turn versus 31-32 days for the internal combustion cars. And that is obviously a real problem for them,” said Jantoon Reigersman, COO at TrueCar.
“And then not only are EVs more expensive, but their own salespeople are untrained. They don’t even know how to answer most of the questions they get. Many of them have 100-200 percent turnover of their sales staff in a given year,” Reigersman told me.
High dealer mark-ups certainly haven’t helped the perception that EVs are overpriced.
The complaints listed by dealers reveal familiar EV bugbears – poor charging infrastructure, the fact that batteries take longer to recharge than it takes to fill a gas tank, and a loss of towing range.
