Canadian dealers prep for changes in service departments as EVs approach

Canadian dealers are preparing for a flurry of changes in their service departments as customers embrace electric vehicles and automakers require new spending to lay the groundwork for the EV era.

Kim Day, COO of Steele Auto Group, which operates 54 new-car dealerships in Atlantic Canada and Texas, said new requirements vary by automaker, but that spending on chargers and other equipment needed to service EVs will be “significant.”

“A lot of dealers are having a difficult time wrapping their head around the ROI [return on investment], especially in the short term, because as we know the rollout of EVs is not going to happen overnight,” Day said during an Automotive News Canada Congress panel. She was joined by three other panelists for the June 8 discussion.

• You can watch the entire panel discussion here.

Though faced with the upfront costs, Day added, the progressive increase in EV sales offers dealers a silver lining, giving them adequate time to “plan and to evolve with technology and evolve with the manufacturers to determine what the true impact is.”

As EV uptake increases, she expects to be able to assess what changes dealership service departments will need to make. One option will be to “scale down” fixed ops and implement a more efficient cost structure, if EV customers are making fewer appointments than traditional vehicle drivers, she said.

‘IT’S A SHIFT FOR THE NETWORK’

Automakers are also not starting from scratch on prepping dealers for EV the transition.

“It's a shift for the network,” said Shane Peever, managing director of Cadillac Canada, but the brand can rely on data from General Motors dealers that have sold large numbers of Chevrolet Bolts and Volts over the past decade.

“While they may not have oil changes to do anymore, there's still a lot of good service revenue and reasons for customers to work with our dealers,” he said, noting customer retention has proved higher among EV owners.

With deliveries of the new Cadillac Lyriq EV scheduled for August, Peever said the brand’s retailers are poised to be “wired and ready to go.” Cadillac is requiring dealers to have at least nine EV chargers, including several fast chargers.

Peever acknowledged Cadillac asked all its Canadian dealers to make a “large investment” as part of the shift, but that come August, its full network will be prepared for the transition.

‘EVERYBODY WILL GET THERE’

David Adams, CEO of the Global Automakers of Canada, which represents overseas automakers in Canada, said this one-size-fits-all model will help ensure customers get a consistent experience at dealerships across the country. While it is understandable some brands are opting for a staged approach among their dealers, easing into EV readiness has its hazards, he added.

“From a consumer perspective, that could potentially be a bit confusing if they have a vehicle of a particular brand and they bought it out of one dealership, but they happen to be traveling and they can't get it serviced at that dealership because that dealer is not an EV-ready dealership.”

Adams said such pitfalls remain, but he expects “everybody will get there in the long run.”

While Cadillac is requiring all its dealers to go electric this summer, the luxury brand has also focused on flexibility, Peever said.

“This transformation really had us look at those facilities programs and traditional models differently, and work really closely with our dealer partners to make sure that what we’re proposing is something that’s easily adopted and supported but also makes business sense for dealer partners.”

For upstart EV makers, building service networks from the ground up leaves even more latitude for scaling offerings to meet demand.

Hans Ulsrud, general manager of Lucid Motors Canada Inc. said the company is working on a three-pronged approach to service to help build credibility as a new brand.

The company’s strategy is anchored by multi-bay, “brick and mortar” service centres that offer a consistent experience in its three key markets of Montreal, Toronto and Vancouver, Ulsrud said. But while the conventional approach will be on offer, Lucid expects mobile service to account for most customer needs.

“A van will be able to go out and complete 80 per cent of the needed repairs on a Lucid Air at a customer’s home or office,” Ulsrud said.

The final prong of the luxury brand’s service strategy hinges on the automotive market’s turn toward connectivity. Lucid will use over-the-air updates, Ulsrud said, for both remote diagnostics and to keep vehicle software up-to-date.