Concerns are growing among motor dealers that the reduced servicing and maintenance requirements of electric cars, plus the high cost of training and equipping technicians, will affect the profitability of workshops and diminish the aftersales experience for customers.
Evidence from leading fleet companies suggests that due to their simplified mechanicals, lightly used braking systems and higher levels of reliability, the service, maintenance and repair (SMR) costs of EVs are around half those of petrol and diesel vehicles.
In addition, most electric cars have longer service intervals while some, such as certain Audis, have no mileage limitation during each two-year scheduled service period.
Manufacturers make maintenance savings a key part of their electric car offer to customers. Nissan, for example, claims owners can cut their costs by 40% compared with an ICE vehicle. Explaining the savings on its website, it tells customers, 'No more oil changes and no tailpipe emissions, means no more emissions tests.'
The savings are highlighted in its service plan with monthly instalments for a Nissan Leaf being £13.99 compared with £19.99 for a petrol model and £23.99 for a diesel.
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Concerned by EVs' reduced servicing requirements and the consequences for aftersales revenue, the National Franchised Dealers Association (NFDA) has established an aftersales working group study to monitor changes within its members' aftersales departments. It plans to publish its findings later this year.
Sue Robinson, chief executive of the NFDA, said, "It has been widely reported that aftersales revenue in franchised dealerships is likely to reduce as more consumers switch to EVs.
There are a number of practical reasons to consider: electric vehicles have fewer moving parts, brakes tend to be replaced less frequently due to regenerative braking, service intervals are usually longer and there are fewer billable hours.
It is important to note that despite the diminishing returns, retailers are still required to make large investments into staff EV training, tools, extra EV charge points and EV courtesy vehicles."
The association paints a gloomy picture but some automotive experts believe the shift to electric could be a catalyst for positive change, with dealers being forced to cultivate longer term relationships with their customers and their cars in order to retain servicing work previously lost to the independent sector.
"The value chain, including the value added by sales, parts and servicing, doesn't work the same way as it does for ICE vehicles, so OEs must look at an EV's lifetime value," says Professor Jim Sakar, president of the IMI. "The way to make money from servicing and maintaining EVs will be to keep cars in the franchise longer than the present 1.5 cycles.
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I'd be interested to see what VW actually do for their £200.
"I believe this requirement to keep vehicles for longer is why car makers are pushing subscriptions and personal contract hire on EVs to capture servicing"
Only partly, and less so as the digital customer journey reduces the need for local dealers. Other reasons include concern over residual values linked to insufficient data on aging batteries, particularly those subject to regular fast charging, and a move to generating revenue through additional services, largely from the cloud, that can be bundled into one agreement and upsold through that customer relationship. Ref Carlos Tavares' excellent press conference at CES.
In recent years, franchise dealers have generally made much more money from parts and servicing than from new car sales because retail margins from new car sales are low. It's fair to say that most consumers begrudge paying big service and repair bills, so they won't mind lower maintenance costs with EVs.
However, as mentioned in the article, it is more likely that EVs will have much higher average repair bills whern they do go wrong, so swings and rounabouts for both EV owners and garages.