Aftersales in the EV future:
plan now to realize tomorrow’s potential

Evolving aftersales networks will include both ICE and EV vehicles for the foreseeable future.

Although EV market share will continue to grow, service revenue opportunities from ICE vehicles on the road will remain strong for years to come. According to the European Automobile Manufacturers’ Association, Europeans keep their vehicles an average of 12 years. In other words, a new vehicle added to the “family fleet” in 2023 may provide retailer service potential through 2035, on average!

EVs also present unique opportunities for service departments, such as adding services for optimum battery-pack maintenance, and new features through connectivity. A higher number of sophisticated technology components are needed for over-the-air (OTA) connectivity, which means they will experience obsolescence sooner and require software and hardware upgrades to stay on pace with newer models.

Altogether, this indicates that service departments need to prepare by assessing and diversifying their offerings, training their personnel on the new technology and services, and taking any necessary steps to develop action plans for meeting the demands of their EV service customers.

Three critical actions retailers can take for maintaining
a healthy aftersales network

Incorporate:

Customers are embracing the idea of online connectivity at the service level for both their ICE and electric vehicles. In fact, almost half of customers in the recent Harris Poll study expect dealers to offer online maintenance scheduling (at 49% in the UK and 48% in Germany) and automated maintenance reminders (at 47% in the UK and 42% in Germany).

And add-on services will become crucial for aftersales department success. For example, storage and winter tyre swaps could be revenue generators. Additionally, franchised retailers who are proactive can establish themselves as tyre safety and service experts. Aggressively pursuing EV tyre business will become progressively more important, especially as specialized tyre shops – which don’t require a retailer or service center for sales and installation – jump on the opportunity.

A number of opportunities for retailers exist, as well. One such opportunity is, with EVs in Europe more likely to be bought on lease or through a Salary Sacrifice Scheme (where payments for vehicles, servicing and insurance are bundled together), retailers can seize the opportunity to become the default service provider at the time of purchase to create guaranteed regular revenue streams.

A strategy that embraces online maintenance scheduling, building service and/or tyre packages into ownership bundles and automated reminders for hardware/software upgrades throughout the life of the vehicle could go a long way to ensure that aftersales continues to be a cornerstone of retailer revenue.

Jumping on the proverbial EV bandwagon represents a multibillion-dollar source of revenue for both the industry and aftersales departments. However, to fully realize this opportunity, retailers must gain and maintain customers’ trust, especially as it relates to usage of personal information. This is an area in clear need of improvement, as the Harris Poll revealed:

• Trust in retailers to responsibly use auto-buyers’ personal information/data is weaker in the UK and Germany than in China
• Only 38% of consumers in the UK – and 42% of consumers in Germany – trust retailers with their personal information/data
• That compares to 56% of consumers in China who strongly trust retailers

Finding new ways to connect with customers and proving that service departments can make their lives easier as they make the switch to EVs is critical. Retailers who follow that path can gain the kind of customer trust that makes new servicing options revenue generators for retailer aftersales departments.

Invest:

To create new opportunities for service departments as customers switch to EVs, retailers need to invest in physical equipment (such as chargers), customer experience processes and specialized tools. Working with a partner who has access to timely and relevant data – and one who can separate the data signal from the noise – will provide the critical insights of where to invest, how to better understand and meet evolving EV customer wants and needs and uncover the greatest potential opportunities for growth.

Retailers should also be aware of strong, independent competition – in the U.S., only 35% of auto buyers agree that retailers have a unique value over independent repair shops. By acting with a sense of urgency, retailers can change that. Those who have the ability to invest can increase visits and revenue by becoming a destination point for their fast-charging capabilities while offering waiting customers amenities similar to – or better than – those at petrol stations today, such as coffee shops and entertainment or food establishments in addition to traditional displays of vehicles and accessories.

By understanding forecasted EV service demand (and how to balance that with ongoing ICE service demand) they can right-size their service department both for today’s business and tomorrow’s challenges.