What’s next for EVs and Retail? 

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Transcript

Elena: We are here still at AutoTech Electrification in the Wards Intelligence living room and I’m here with John Possumato, one of my favorite friends and we are going to talk about not only what we did at the conference this time around, but your thoughts on retail and electrification. So, John, how are you doing this morning?

John: Perfect, perfect. Thank you for having me up there. I’m glad I’m one of your best friends. So yeah, as I said yesterday, there’s a lot of new technologies. There’s a lot of good information here but nothing actually starts as I was told a long time ago from an old retail person and then starts to sell a car right? So that’s sort of my end of it on retails is with Evie vehicles where the sales going how are they changing? How’s the dealership changing to adapt to the very different methods to sell for a very different propulsion system?

Elena: And and so I want to talk a little bit more about the panel that you had yesterday, the CEO had Ed Roberts on the panel from Bozart Ford Lincoln, you had Michelle Krebs from Cox Automotive also had Jimmy Douglas from Plug. So he had a variety of different perspectives on a retail level. Was there any insight that came from that panel that surprised you or gave you a moment to pause and think that’s different?

John: There were many when you have a panel like that it’s really easy as a moderator to look good because you got some expertise. And there were a lot of things that that surprised me. You know, I do this every day. Particularly on the adaption of electrification, I thought Ed Roberts insight into fixed operations now, not only was he not afraid of over the air updates, but was embracing them because there was a higher customer satisfaction. And indeed, that leads to more retention and more retention leads to more mixed ops work, even though there’s a reduction in maintenance work for an end that was number one, Jimmy’s new platform for wholesale Evie some of the discussion that he had, I had no idea that really only 8000 dealers in the United States are retail selling EVs and they’re doing it in quantity and the other ones kind of aren’t and that really shocked me because I would have assumed differently even though I’m in business every day. But but those that are doing it have a much, much higher term and much, much higher profit level. So that was really enlightening as well and Michelle’s insight in general and the big picture of where this whole thing is going is really interesting that that was very glad to hear that she as I thought that was going anywhere. There’s no adapt. Another old retail person told me dealers are like cockroaches, they will survive the apocalypse. When everything else is gone. And I actually truly believe that.

Elena: I think I’ve heard you say that once or twice and every time I chuckle because it’s very accurate actually. So let’s talk about you know your crystal ball because you and I we have many a conversation over the dinner table just about electrification and where things are heading. If you had a crystal ball, what would you see in the crystal ball as it pertains to electrification and retail, we’re going to get the retail split on things because you and I are not technical people.

John: So a long time ago, a guy named electric shaver said you know I thought about what the company this is sort of where I see retail going and I found a drive away on this. If you go back to the evolution of car sales for the first 80 years or so, there were straight vehicle sales, and the cars got more expensive to luxury cars and consumer leasing took over and before the vehicle crunch before the COVID supply shortage, right leasing was 30 40% of the market because it made vehicles affordable. EVs are more expensive than ICE units right now. I honestly believe the third channel coming which is called a micro lease, call it a long term rental to own. Call it a subscription is a way to have a turnkey transportation with no long term financial commitment to kind of grow with the vehicle I honestly believe that will be third channel, the dealers will utilize become more and more predominant, right because again no financial commitment. People are nervous about EBS so they get to try it. lower price point and easy inner out transparent mechanism. I honestly believe that the new proposal system will create a new sort of sales distribution system where this type of quote sale will predominate. And Deloitte just came out with a study that said that Europe is already in the 30% range Western European long term rental or micro lease whatever you want to call it. And they’re also ahead of this in EV penetration. And because AutoNation just came out with a micro lease program, so I mean, I think that the signs are there that this is coming and again I like that the company or that so I really do believe that right now. That is not the case. Right now EVs are for the app the early adopters were all affluent. They’re only in 20 dma’s market areas of the United States. And it’s very skewed. towards towards rich folks. I mean is Mary Barra said 98% of the EVS sold last year were the people who had two other cars registered in their name so right now isn’t the case. But in order to be any of the objectives of the OEMs or the government, or really the world. It’s going to have to be to everyone and we’re going to have to develop mechanisms to make that happen.

Elena: John thank you as always, always love to officially record our conversations and have it actually be heard by other people instead of just between you and I so this is this has been great.

John: First off, on the conference. It’s conferences like these that move the needle forward completely right. And you know, there’s the retail aspect of EVs for everyone and then there’s the technical innovation and exchanging of ideas that make that work. So it’s conference like this and they have a 2024 look for more, more conferences and more exchanges like this, that are actually going to mastermind how this rolls out because again, this is a the biggest change to happen in automotive since automotive started. So it’s going to take a lot of folks and a lot of innovation and a lot of teamwork. To move things forward. This is an example of that.

Elena: Exactly. Teamwork makes the dream work. And I just put the very trite corporate jargon in there for you. So John, thank you so much. Always a pleasure. I will see you very soon.