In a Nov. 2023 Inc. article, Howard Tullman points out that most car dealers aren’t much interested in selling electric vehicles (EVs.) And the same is likely true for many farm equipment dealers.
The challenges to auto dealers outlined by the general managing partner with G2Tand Chicago High Tech Investors also represents good advice for farm equipment dealers and manufacturers as they confront the issues related to the future of EV vehicles in rural America.
On the car side, a recent survey indicates more than a third of U.S. auto dealers wouldn’t offer EVs to their customers even if they could. It’s because adding EVs, funding new staff training, increased equipment costs to maintain and service these cars, building out new showrooms, adding display space and facing uncertain near-term demand aren’t especially attractive undertakings.
“Dealers will need to be bribed, cajoled and dragged across the finish line to be happy with EVs…”
At the same time General Motors (GM), Ford and Stellantis North America (formerly Chrysler Corp.) and a number of foreign car manufacturers have delayed further investments in EV car and truck factories and battery plants. They recognize consumer demand for battery-powered cars and trucks is much slower than anticipated.
As a result, GM recently pushed back by a year opening an electronic truck factory in Michigan. It also scrapped an earlier goal of producing 400,000 EV cars and trucks over an upcoming 2-year stretch.
Skeptical Dealers
Tullman says the U.S. goal of having two-thirds of new cars sold be EVs by 2032 seems like a pipe dream to most auto dealers. He adds most established auto dealers are fairly fat and happy with the way things have gone over the decades for them and their families. While they may have family and generational challenges, they’ve enjoyed exclusive territories, scarce inventories, political protection and very little price competition. Most car dealers don’t like change, they don’t like spending new money and aren’t sold on the future of EV vehicles.
Right now car and truck manufacturers are trying hard to push EVs out the door — as a loaded dealer is a loyal dealer — because these higher-priced vehicles are much cheaper and easier to build than traditional gas- and diesel-powered cars and trucks. Tullman believes dealers are going to need to be bribed, cajoled and eventually dragged across the finish line to be happy with EVs.
Cost Sharing Essential
He says manufacturers need to understand that they’re going to have to share in the costs of the EV transition with dealers.
“The OEMs are going to have to finance equipment, subsidize EV training in both sales and service, and lobby nationally for extensive state and federal investments in charging stations if they want to win over the roughly 12,000 auto dealerships out there today that are sitting on the fence,” he says.
In conclusion, Tullman points out that the bottom line for dealers is an old and simple rule: Nothing good happens to a business without salespeople who are willing to sell your product.
That’s good advice for all farm equipment dealers and manufacturers.
