On the Road to Electric Vehicles
First in a series
YOUNGSTOWN, Ohio – The drive toward electric vehicles is accelerating at a dizzying pace, as legacy automakers such as General Motors push aggressive timelines to adapt their business models and new inventories toward an all EV platform over the next decade.
Keeping in step with this seismic transition are the auto dealerships that staff the front lines, serving as the point of contact between the major automakers and consumers.
“It’s an exciting time to be a GM dealer,” says Alexa Sweeney Blackann, president of Sweeney Chevrolet Buick GMC. “We’re in an area that is lagging in EV adoption. But we’re looking forward to the new products.”
As a new model dealership for GM, Sweeney faces both opportunities and challenges as it navigates the changes that lay ahead.
This is the first of six case studies in which The Business Journal examines the industry’s evolution toward electric vehicles from the vantage point of the Sweeney dealership.
General Motors has pledged to develop an all-EV lineup for new light-duty vehicles by 2035, powered by its Ultium platform. Indeed, in less than three years from now, GM says it plans to have introduced at least 30 new EV models on the market.
That places a tight window for dealerships such as Sweeney to absorb all the technological intricacies, tooling and service requirements, and marketing strategies designed to inform and educate consumers about the future of the industry.
The dealership is already ahead of the curve, Blackann says, preparing existing and future employees in an industry drastically different from 10 years ago.
“From a service perspective, we’re interested in getting young people to learn more about opportunities in the service department,” she says. The electronic content in new vehicles today is exponentially higher than it was a decade ago, driving more interest from those skilled in computer programming rather than traditional engine repair, Blackann adds. Widespread EV adoption in the future will no doubt enhance the demand for these skills among technicians.
The dealership has partnered with the Mahoning County Career and Technical Center, the Mahoning Valley Manufacturers Coalition, and institutions such as Youngstown State University to help lay the groundwork for EV service and sales over the next several years, Blackann says.
“We’ve had a great partnership with MCCTC,” she says. There are students of high school age who demonstrate a genuine interest in auto tech. But the discipline and curriculum are likely to change as EVs become more dominant in the marketplace, a transformation that is gradually now underway.
“It also involves computer programming. So it changes the conversation to what we’re looking to do in the future,” she says. “Because of the enthusiasm for a full-electric future in 10 years, we have to be talking to young people now.”
CHANGING THE CONSUMER CULTURE
While the dealership is excited about the potential of electric vehicles, the more daunting challenge ahead is building that same enthusiasm within the regional consumer market, Blackann says.
“If you look at the data, there’s more interest in the coastal areas [related to EVs],” Blackann says.
However, recent announcements of new GM products – most significantly the Chevrolet Silverado EV, which will ship in the fall of 2023 – should boost interest considerably as these vehicles become more standard over the next several years.
“We think the Silverado is going to be a game-changer for adoption of EVs,” she says.
Blackann says it’s the job of the Sweeney dealership to ascertain what best fits the customer and to respond to the likely long list of questions buyers have regarding EVs. Among the biggest concerns from those considering the switch is the battery range of the vehicle and whether the charging infrastructure is sufficient to support travel beyond a single charge.
GM has helped to allay some of those concerns – termed “range anxiety” – with incentives such as free installation of home chargers with the purchase of a new GMC or Chevrolet EV, Blackann says. Rental or lease vehicles would receive credits to be used at charging stations, she says.
On average, new EVs can hold a single charge for about 250 miles.
“We’re here to help those customers and to be a reliable source to answer those questions,” she says. “Our job is to be experts in the marketplace.”
In the Mahoning Valley, EV charging infrastructure has yet to materialize. And it’s still some years before many of the newly introduced electric models hit the road. While consumer adoption rates are stronger on the West and East coasts, some hesitation remains among buyers across Middle America as to whether an EV is appropriate for them.
“This is new to a lot of people,” says Jessica Caldwell, executive director of insights for Edmunds. In California, for example, the EV adoption rate in October 2021 stood at approximately 9%. This compares to a national average of just less than 3%, she says. “It shows how far we have to go to educate customers.”
Large metropolitan regions such as Los Angeles and New York City are saturated with public charging stations, Caldwell says.
Elsewhere, this infrastructure is yet to be built out, an issue the federal government hopes to address with a $5 billion investment directed to states to fund the development of new charging stations.
Ohio is expected to receive $140 million in grants over the next five years.
“All of a sudden, customers will have questions like, ‘How do I charge it? Where do I get a home charger?’” Caldwell says. “Savvy dealers have to be prepared for these questions even if they don’t have the answers. They should know the resources customers could turn to.”
Dealerships must also be ready to answer questions about the new features of an EV and how the vehicles operate, Caldwell says.
“They are the face of the brand and the face of the buying process,” she says.
According to “A Dealer Guide to Electric Vehicles,” recently distributed by the National Automobile Dealers Association, or NADA, demand for EVs is accelerating at a rapid clip.
During the first quarter of 2021, U.S. sales of battery electric vehicles (BEVs), or plug-in hybrids, increased 45% compared to the same period a year earlier, according to NADA. By 2030, it’s projected that between 25% to 30% of the new U.S. car market will be dominated by EVs or plug-in hybrids.
By 2035, this segment will command 45% to 50% of new U.S. vehicle sales, according to the NADA report, which cited data provided by IHS Markit.
“That’s a huge opportunity for franchised dealers,” the dealer guide says.
There’s evidence that adoption is linked to firsthand experience with EVs.
The J.D. Power U.S. Electric Vehicle Consideration Study, released in February 2021, showed that of those who have leased or owned a battery-powered EV, 46% of respondents were “very likely” to consider another as their next purchase, as opposed to 6% who responded it was “very unlikely” they would purchase another one.
About half of the respondents, however, said they had never been in an EV, the study showed. Those who did drive or ride in an EV were nearly three times more likely to reply it was “very likely” they would consider buying one.
“Anything stakeholders can do to get more people into electric vehicles, whether it’s experimental events, take-home test drives or other proactive efforts, will help break down the preconceptions people have about BEVs and drive higher consideration,” Stewart Stropp, senior director, automotive retail at J.D. Power, said in a statement.
The Sweeney dealership has amassed years of experience with GM’s initial line of EVs – the Chevrolet Volt, a plug-in hybrid that was introduced in 2011 but discontinued in 2019, and the all-electric Chevrolet Bolt EV, introduced in 2016.
“The electrical connections in the Chevy Volt are comparable to a 747,” Blackann says. “So much of the car is computer-based.”
GM remains faithful to developing and marketing its traditional combustion engine vehicles, Blackann says. But these new models are equipped with sophisticated electronics to make the leap to EVs much easier. “The Chevy Tahoe has an internal combustion engine. But its electrical connections are really elaborate,” she says.
GM INVESTMENT IN ‘VOLTAGE VALLEY’
Raising EV awareness in the Mahoning Valley is likely to be greatly enhanced by the Ultium Cells LLC’s $2.3 billion battery cell manufacturing plant now under construction in Lordstown, Blackann says. Ultium, a partnership between GM and LG Energy Solution, is slated to begin production of battery cells this summer to serve new GM EV models.
“When GM made an investment in this community, it spoke volumes about their commitment,” Blackann says. GM customer loyalty is still fierce across the region, she says, and the menu of new EV products set for release over the next several years is equally exciting.
The GMC Hummer EV will hit showrooms later this year, Blackann says, while deliveries of the Silverado will begin in the fall of 2023. Other EVs announced by GM are the Cadillac Lyriq and the Chevrolet Equinox.
Sabin Blake, GM communications manager for dealers, says the company is providing its dealer network with necessary training.
“We’ve designed unique curriculum to support EVs across a variety of topics including product, charging and range, the sales process and the EV customer,” Sabin says. “We are educating dedicated EV specialists at each dealership to manage the customer sales and delivery process.”
The automaker has plans for in-person training sessions and will provide a forum for EV personnel to engage directly with GM’s EV experts. “There is also web-based, virtual and hands-on training requirements for service technicians as well,” he says.
Blackann projects that the growth of the EV market could require additional expansion at Sweeney.
“We hope it will continue to grow,” she says. “When we talk about upcoming vehicles, there’s interest and I think you’ll see further enthusiasm. It’s only positive.”
Pictured: Mihidul Kaluwila and James Moon peek under the hood of a Bolt EV at Sweeney Chevrolet in Boardman.
Copyright 2024 The Business Journal, Youngstown, Ohio.