Canada’s auto dealers are rethinking their fixed operations as demand for electric vehicles softens and automakers limit or postpone production.
“The bottom has really fallen out of that market,” said Michael Wyant, COO of the Wyant Group in Saskatoon, which operates 19 dealerships in British Columbia, Alberta and Saskatchewan.
“We are fully supportive of the EV transition over time and will work through it with our manufacturers. It’s just not happening as quickly as it looked like it might a couple of years ago.”
As a result, Wyant is pausing installation of EV infrastructure such as Level 3 fast chargers at Jubilee Ford in Saskatoon. “We roughed in for six superchargers,” he said, estimating that each fast charger costs $150,000 to install.
“With EV demand having slowed down, dealers and OEM’s have pulled back on charging infrastructure investments/requirements at this point.”
In response to softening growth of the EV market, some automakers have scaled back their plans. Ford Motor Co. planned to build EVs in Oakville, Ont., but will instead build Super Duty pickups.
Ford also has walked away from its Model e program, which required dealers to make significant investments to be able to sell the Mustang Mach-E electric crossover and the F-150 Lightning electric pickup.
GM CUTS PRODUCTION PLANS
In June, General Motors CFO Paul Jacobson said the company was scaling back 2024 EV production plans to between 200,000 and 250,000 from 200,000 to 300,000, according to sibling publication Automotive News.
Wyant also questions the need for dealers to invest grand sums of money in EV infrastructure.
“Everybody wants to push the dealers to install chargers,” he said, “but the reality is consumers aren’t coming to dealerships to charge their vehicles.”
According to Hydro Quebec, 90 per cent of EV owners charge their vehicles at home.
For most dealerships, the mandates to install EV infrastructure have already been honoured, said Michael Carmichael, president of southern Ontario’s six-dealership UpAuto group. But many automakers have additional requirements for chargers in 2028 and 2030, he said.
“I think what you’ll find is yeah, whoa, whoa, whoa,” Carmichael said. “We’ve got EVs in stock, but nobody’s buying them.”
Carmichael and Wyant both said the need for EV infrastructure at dealerships is far simpler than automakers contend. Dealerships need charging for three reasons only: to prepare a car for customer delivery; to keep cars charged for test drives; and to be available for the service department when repairing EVs.
Having chargers available for customers is “a novel concept, and maybe in 30 years, 40 years, it might be the case,” Carmichael said.
“We’ve got the chargers [now]. They are very, very seldom used.”
ENGINES STILL DRIVE BUSINESS
Instead of bolstering his EV infrastructure, Carmichael said, he is focusing on servicing internal-combustion vehicles and stocking the consumables that all vehicles — electric and internal combustion — need: wiper blades, brake pads and cabin air filters.
Early adopters “have already eaten,” Carmichael said, and the market for EVs won’t start to pick up again until the technology and charging infrastructure improve.
The risk, he said, is that as government sales mandates increase the percentage of new-vehicle sales each year that must be zero emission, “carmakers will just build fewer cars, lowering the denominator to hit the percentage.”
The federal mandate requires zero-emission vehicles account for an escalating percentage of light-duty sales, beginning with 20 per cent by 2026 and arriving at 100 per cent by 2035.
The technology isn’t where it needs to be for EV demand to pick up, at least in cold-weather locations such as the Prairies, said Wyant.
“I have an F-150 Lightning, and I love it,” he said. “But if my kid has a hockey tournament an hour outside of town, and it’s minus 25, I can’t take it.”
The focus needs to be on convenient access to public charging, not forcing dealers to install chargers that will rarely be used, said Huw Williams, public affairs director for the Canadian Automobile Dealers Association (CADA).
“We won’t have an EV adoption rate that matches the mandates if we don’t have public charging,” he said, pointing to CADA’s Countdown to 2035 initiative, which calls for 100 charging stations to be installed each day for 11 years to fulfill the mandate.
