First in a series
YOUNGSTOWN, Ohio — The trend toward electric vehicles is accelerating at a dizzying rate, as traditional automakers such as General Motors are imposing aggressive deadlines to adapt their business models and new inventory to an all-electric platform over the course of of the next decade.
In step with this seismic transition, car dealerships are on the front line, serving as the point of contact between major automakers and consumers.
“It’s an exciting time to be a GM dealership,” said Alexa Sweeney Blackann, president of Sweeney Chevrolet Buick GMC. “We are in a region that is lagging behind in the adoption of electric vehicles. But we are looking forward to the new products.
As a new model dealer for GM, Sweeney faces both opportunities and challenges as he navigates the changes that lie ahead.
This is the first of six case studies in which The Business Journal examines the industry’s shift towards electric vehicles from the perspective of dealership Sweeney.
General Motors has pledged to develop an all-electric lineup for new light-duty vehicles by 2035, powered by its Ultium platform. Indeed, in less than three years, GM expects to have introduced at least 30 new models of electric vehicles on the market.
This places a narrow window for dealers such as Sweeney to absorb all of the technological complexities, 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 current and future employees in an industry radically different from 10 years ago.
“From a service perspective, we want to get young people to learn more about opportunities within after-sales service,” she says. The electronics content of new vehicles today is exponentially higher than it was a decade ago, attracting more interest from those skilled in computer programming rather than traditional engine repair, adds Blackann. The widespread adoption of electric vehicles in the future will undoubtedly increase 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 foundation for electric vehicle service and sales over the next few years. Blackann said.
“We had a great partnership with the MCCTC,” she says. There are high school students who show a genuine interest in automotive technology. But the discipline and the agenda are likely to change as electric vehicles become more dominant in the market, a transformation that is gradually underway.
“It also involves computer programming. So that changes the conversation about what we’re looking to do in the future,” she says. “Because of the excitement for an all-electric future 10 years from now, we need to talk to young people now.”
CHANGING THE CONSUMER CULTURE
While the dealership is excited about the potential of electric vehicles, the most daunting challenge ahead is generating the same excitement within the regional consumer market, Blackann says.
“If you look at the data, there is more interest in coastal areas [related to EVs]Blackann says.
However, recent announcements of new GM products — including the Chevrolet Silverado EV, which will ship in the fall of 2023 — should boost interest significantly as these vehicles become more common over the next few years.
“We believe the Silverado will be a game-changer for EV adoption,” she says.
Blackann says it’s the Sweeney dealership’s job to figure out what’s best for the customer and answer the likely long list of questions buyers have about electric vehicles. Vehicle battery range and the ability of the charging infrastructure to support travel beyond a single charge are among the biggest concerns for those considering a switch.
GM has helped ease some of those worries — called “range anxiety” — with incentives like free home charger installation with the purchase of a new GMC or Chevrolet EV, Blackann says. Rental or leasing vehicles would receive credits to use at charging stations, she says.
On average, new electric vehicles can hold a single charge for about 250 miles.
“We’re here to help those customers and to be a trusted source to answer those questions,” she says. “Our job is to be experts in the market.”
In the Mahoning Valley, electric vehicle charging infrastructure has yet to materialize. And it will be a few more years before many newly introduced electric models hit the road. While consumer adoption rates are higher on the west and east coasts, some hesitation remains among Central American buyers about whether an electric vehicle is right 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 was around 9%. That compares to a national average of just under 3%, she says. “It shows how far we have to go to educate customers.”
Major metropolitan areas such as Los Angeles and New York are saturated with public charging stations, Caldwell says.
Elsewhere, that infrastructure has yet to be built, a problem the federal government hopes to address with a $5 billion investment for 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 be asking questions like, ‘How do I top it up? Where can I get a home charger? Caldwell said. “Savvy dealers need to be prepared for these questions even if they don’t have the answers. They must know the resources to which customers can turn.
Dealers also need to be prepared to answer questions about new EV features and how 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 electric vehicles is accelerating at a rapid rate.
During the first quarter of 2021, U.S. sales of battery electric vehicles (BEVs), or plug-in hybrids, were up 45% from the same period a year earlier, according to NADA. By 2030, it is expected that between 25% and 30% of the US new car market will be dominated by electric vehicles or plug-in hybrids.
By 2035, this segment will account for 45 to 50 percent of new vehicle sales in the United States, according to the NADA report, which cites data provided by IHS Markit.
“This is a huge opportunity for franchise dealers,” says the dealer guide.
There is evidence that adoption is linked to first-hand experience with electric vehicles.
JD Power’s US Electric Vehicle Consideration study, published in February 2021, showed that among those who have rented or owned a battery-powered EV, 46% of respondents were “very likely” to consider another as their next purchase, compared to 6% who said they were “very unlikely” to buy another one.
However, about half of respondents said they had never been in an electric vehicle, according to the study. Those who have driven or ridden in an electric vehicle were almost three times more likely to say they were “very likely” to consider buying one.
“Anything stakeholders can do to get more people to use electric vehicles, whether it’s demonstration events, in-home test drives or other proactive efforts, will help shatter preconceptions. people have on BEVs and drive greater consideration,” Stewart Stropp, senior manager, automotive retail at JD Power, said in a statement.
The Sweeney dealer has accumulated years of experience with GM’s initial lineup of electric vehicles – 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 Chevy Volt’s electrical connections are comparable to a 747,” Blackann says. “A lot of the car is computerized.”
GM remains committed to developing and marketing its traditional combustion engine vehicles, Blackann says. But these new models are equipped with sophisticated electronics to facilitate the transition to electric vehicles. “The Chevy Tahoe has an internal combustion engine. But its electrical connections are really elaborate,” she says.
GM’S INVESTMENT IN ‘VOLTAGE VALLEY’
Awareness of electric vehicles in the Mahoning Valley is expected to be greatly enhanced by Ultium Cells LLC’s $2.3 billion battery cell manufacturing facility currently under construction in Lordstown, Blackann said. Ultium, a partnership between GM and LG Energy Solution, is expected to begin battery cell production this summer to serve new GM EV models.
“When GM has made an investment in this community, it speaks volumes about their commitment,” says Blackann. GM’s customer loyalty is still fierce across the region, she says, and the menu of new EV products set to launch over the next few years is equally exciting.
The GMC Hummer EV will hit showrooms later this year, Blackann says, while deliveries of the Silverado will begin in fall 2023. Other electric vehicles announced by GM are the Cadillac Lyriq and the Chevrolet Equinox.
Sabin Blake, GM’s director of dealer communications, says the company provides its dealer network with the necessary training.
“We have designed a unique program to support electric vehicles in a variety of topics, including product, charging and range, the sales process and the electric vehicle customer,” says Sabin. “We are training dedicated EV specialists in each dealership to manage the sales and delivery process to customers.”
The automaker is planning in-person training sessions and will provide a forum for EV personnel to engage directly with GM EV experts. “There are also web-based, virtual and hands-on training requirements for service technicians,” he says.
Blackann predicts that growth in the electric vehicle market may require further 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 even more excitement. That’s all positive.”
Pictured: Mihidul Kaluwila and James Moon look under the hood of a Bolt EV at Sweeney Chevrolet in Boardman.