It’s all about managing the supply chain and building out the charging infrastructure. As new EV models continue to be introduced; showcasing lower price points, longer drive range, and a wide array of modern technology, there is a push for the average driver to make the switch. With mass adoption, economies of scale and the power of the collective begin to take shape; refining assembly processes, easing supply chain disruptions, and “normalizing” what used to be considered a fringe choice for a select few.
From a user’s standpoint, thoughts about where to charge or when to charge have taken a back seat to the enjoyment of the drive. When it comes to chargers and the overall infrastructure buildout, we still have a significant knowledge gap about what and where chargers are needed. In addition, it is still a confusing narrative of how to buy, install, and use/pay for charging. What is intuitive to most (charging a phone) is still a bit of a stretch when it comes to a vehicle; but that will change. The growth of the EV market will have a domino effect on the rest of the automotive industry, especially given the fact EVs have significantly fewer mechanical parts, less fluids and filters, can be “repaired/upgraded” over the air, and employ a host of features to help reduce collisions. On the other hand, many EV’s may take longer to repair and may require unique and costly parts, at least until aftermarket servicing expands.
What do you predict will happen in the automotive industry in 20 years?
Dealerships will continue to rapidly evolve to compete and capture non-warranty service work and tire sales. The franchise dealer model will continue to be challenged with new OEM’s moving to a direct-to-consumer model (Tesla, Rivian, Ford EV for example). Consumers in large do not like the traditional car buying experience and they will push to remove the paperwork and the hassle from the process. Personally, the online buying experience I had when getting my vehicle was spectacular. The entire process was handled online and on my phone. The car buying experience turned into a delivery experience and I would be hard pressed to ever go back. This will likely be true for the service industry as well. Quick lube centers will either evolve to supply wheel and tire services or they will become irrelevant over the next several decades as electric vehicles do not require oil changes, transmission flushes, and other maintenance items. The aging ICE vehicles will likely be driven less, further reducing the need for regular maintenance.
What are the biggest challenges of today and soon for the industry?
While EVs are taking off in densely populated regions, the infrastructure is not ready for countrywide adoption and while “range anxiety” is lessening, “total range life” is growing. How long will a battery last? How much will it cost to replace? What impact will that have on the pre-owned EV markets? These and other questions won’t be answered in the next few years but will continue to be asked as the mobility evolution continues. While the “corridor” infrastructure (chargers on/near highways, interstate, and commerce routes) get the bulk of attention, the need to electrify multi-family lots, parking garages, street parking, etc. is a real challenge. Cars no longer have to drive to a fuel station but instead you can put fuel stations anywhere a car is parked; this is a monumental shift in approach and one that has far reaching implications. There is no doubt that the interest, demand, and investment are there, now we wait for technology to catch up to lower the bar for entry. Our corporate office in Iowa now has a charger, a sign of the change coming!
What is one last piece of advice?
Utilize the experience of others and do your research to know your local market’s adoption of electric vehicles. If the demand is there, leverage the sources of capital available to grow and prepare to scale as adoption increases, technology improves, and costs come down. You must stay in the game to win the game. Reputation is your best advertising campaign; treat customers fairly and provide transparent communication. Invest in quality people and quality equipment. They both may cost more upfront but will pay off in spades over the long run. Stay educated on maintenance opportunities, repair procedures, and equipment/services needed to handle the increasing adoption of EVs and be prepared to adapt your business accordingly.
