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A way for dealerships to make money on EVs

A way for dealerships to make money on EVs

So as we all know, dealerships make a vast majority of their money on service and parts. We also know that EVs are not where its at to make money from service. So an idea that dealerships should look into, is becoming EV charging lounges. Meaning, set up small cafes for EV owners to get something to eat while charging. They could do as Barnes n Noble did and that was to set up cafes, featuring Starbucks products. There is huge profit in coffee and just beverages in general, so this would offset in theory, the lost revenue from service. I mean, we all criticize the notion of having to charge at a dealership because what is there to do in the waiting room at a dealer. Granted there may be some zoning issues in some locations, but at least it's way for a dealer to stand out amongst the competition. The internet has changed the way dealers sell/advertise cars. EVs are/will change the way dealers make money. I think the forward looking dealers will see the writing on the wall, learn the EV culture and think about setting up a café.

El Mirio | 2019年1月29日

If I where a commercial developer here is what I would do, build a complex which has a Carwash, Nail Salon, Hairdresser, Dry Cleaner, Bar/Cafe and a small Arcade for the kids, all in walking distance.

Carwash would park your car and plug in for you while you run some other errants. I bet this would run like a charm.

PrescottRichard | 2019年1月29日

I would like to see destination charging or urban supercharging in small towns’ downtowns.

For example- Prescott AZ has a parking structure downtown, SCs there would be great for the many businesses within walking distance. The only destination charger right now is at a Marriot which is close by but not as centrally located as the parking garage.

Maybe I’m optimistic but stuff like that could help revitalize some of these places that got bypassed by highways.

kcheng | 2019年1月29日

How much do you think it'll cost them to setup a small cafe with enough chargers to attract EVers? The Porsche press release that came out the other day detailed their investment in a charging network of about 200 dealers, and how much it would cost, and it came out to about $366k each. But, those Porsche dealers already have a pretty snazzy cafe lounge. And, they're probably only adding about 4 charging stands at each. For an EV cafe, these regular dealerships are going to have to upgrade their lounges, and put in enough charging stations to actually attract people. That's going to cost more than what Porsche is investing to upgrade their dealership lounges, and adding a few EV stations.

The problem is they eventually will be competing with standalone charging stations, and those are placed near several places, like Starbucks, Chipotle, etc. Which would you rather go to, the charging station where you have several choices, or the one at a car dealership where there are no other choices within easy walking distance?

jordanrichard | 2019年1月29日

Every business would love to have a captive "audience", EV charging would get you just that. I am sure that is why the Southeast gas station chain Sheetz partnered with Tesla to install superchargers at many of their locations. In my travels to NC form CT, two locations are in the parking lots of a WaWa's. So, just to bring this back to dealers, this would be a great way to not only make up loss service revenue, but they might sell some branded swag as well, particularly Porsche dealers. High end dealers already have customer waiting areas that look like lounges, they just need to have real food available.

jordanrichard | 2019年1月29日

Though this idea will only work for those dealers that are easily accessible to a highway.

SO | 2019年1月29日

And still have sales staff ask me about buying a new vehicle? No thanks.

Mike83 | 2019年1月29日

Try to get a job with TESLA

carlk | 2019年1月29日

Their service departments charge ~$200/hr labor. Let's say they could sell you $10 worth of coffee and scone for an one hour stay which one do you think they'd prefer to have? It'll be awfully difficult to direct dealers away from the ICE model.

jordanrichard | 2019年1月29日

Well they are going to have to come up with something to make up for lost revenue. So either they go all together out of business or adapt to making less revenue. Just as I think anyone looking to build a new gas station would be best to add EV chargers like Teslas, dealers should do the same.

It was just an idea for a way for them to stay in business. I mean how else are they going to survive?

kcheng | 2019年1月29日

Porsche is already planning this.

jordanrichard | 2019年1月29日

Porsche corporate is, but not all dealers will spend the money to install a sizeable bank of chargers.

carlk | 2019年1月29日

jordan My point is dealers are just like those auto companies. Anything that will make EV more convenient is not to their best interests. They of course will do something to make it look good but that will be it. If yours is a truly good idea to increase EV demand then I'm pretty sure it will not happen.

Things will start to happen only when we have reached the tipping point. We are getting there but not quite yet.

RedShift | 2019年1月29日

How about a strip club to cater to some corners of Tesla world? :-D

Get charged and get charged up can be a slogan.

Yodrak. | 2019年1月29日

"I think the forward looking dealers will see the writing on the wall, learn the EV culture and think about setting up a café."

This reminds me how so many gas stations these days make their real money with 'convenience' stores. (Almost forgot since I don't visit gas stations any more.)

"How about a strip club to cater to some corners of Tesla world? :-D"

I'm pleased to know that we still think agree on some issues. :-)

blue adept | 2019年1月29日

Literally ANY stripmall would be a far more suitable place for a charging installation than a dealership, ANY...!

blue adept | 2019年1月29日

No, RedShift, just...No!

Tesla isn't out to encourage or enable depravity, it's out to enlighten, enrich and better people's lives.

jordanrichard | 2019年1月30日

blue adept, you are missing the point to the thread. I was simply proposing a way for dealers make up for some of the lost revenue from selling their respective EVs. In theory, if they can see the potential revenue from having a captive audience while they are charging, they might be more receptive to selling EVs. Disney has rides to get you in to buy swag and over priced food. Hard Rock café has rock memorabilia to get you in to pay for over priced food. Dealers would sell EVs to get you in to buy swag and food. Dealers could compete with each other by offering better amenities. Again though, this would primarily only work for dealerships closely located to the highways.

For any dealer to survive, they will need to adapt to the EV culture.

RedShift | 2019年1月30日

@blueadept

Aren’t you discriminating against the ‘differently entertained’? :-)

carlk | 2019年1月30日

Sure but they will never learn until you hit them with a big stick. That's why Tesla is here.

carlk | 2019年1月30日

That post was to reply jordan's.

jordanrichard | 2019年1月30日

carlk, I completely agree. With that said, there are some forward think dealers who might/should think of doing this. Though as I mentioned in one of posts, there may be some zooming/health regulations for a dealer to set up a café that prepares food.

jordanrichard | 2019年1月30日

"....some forward thinking dealers"

Mike83 | 2019年1月30日

Do you mean the legal pot dealers?

kcheng | 2019年1月30日

Yeah, a pot cafe might help. Elon would visit.

Mike83 | 2019年1月30日

I don't think Elon would visit. He isn't a pot smoker as he has said.

Yodrak. | 2019年1月30日

"For any dealer to survive, they will need to adapt to the EV culture."

I think we have a long time to go before this becomes the case. EVs are high-end vehicles, that's where Tesla is and where the competition (such as it is) is coming from. Audi, BMW, Jaguar, Porsche, Volvo - none of them sell a whole lot of cars, just a relative few expensive 'performance' cars. Maybe those dealers could go for something like this.

jordanrichard | 2019年1月31日

Yodrak, would you consider the Leaf, the Bolt and the Hyundai Kona as "high-end" cars?

Yodrak. | 2019年1月31日

They are low-end EVs, but they do cost as much or more than the average new car and, I expect, considerably more than the median new car. So yes, for a lot of folks they are high end - just not for Tesla, Audi, BMW, etc owners.

Yodrak. | 2019年1月31日

I should clarify by saying high-end in terms of cost, not panache.

blue adept | 2019年1月31日

@jordanrichard

I understand your motivations, but what you don't seem to understand is what I and several others here do, that is, ICE dealers aren't ever going to 'catch on' or engage in any sort of business practice that would stand to distract from their core business of selling ICE cars, ergo, the ONLY way dealerships are going to "make money on EV's" is to actually swap out their entire ICE inventory for EV's.

I wouldn't risk charging even one of my cars at an ICE-sponsored charging station on the potential chance of their rigging the charger to somehow damage my car's battery pack!

That is the reality of just how malicious the sentiment of ICE dealers is towards EV's, Tesla in particular.

blue adept | 2019年1月31日

@RedShift

That's NOT "entertainment"! LOL

jordanrichard | 2019年1月31日

No, I do understand. Selling just EVs “cradle to grave” will generate less revenue for the dealers. So I was just proposing a way for the dealers to still stay in business selling EVs. If a dealer doesn’t accept/adopt selling EVs, they will go out of business. The fact that an CEO at Toyota has confirmed 4-5% of their customers that defect to another brand, are buying Teslas, tells you that it is being felt by their dealers.

blue adept | 2019年1月31日

The ONLY way they could acquire even a modicum of trust at this point is for them to completely clear their lots and inventory of ICE's, period!

You've no idea of just how malicious, bitter, hostile, and just plain nasty ICE manufacturers, especially their dealers, and even state legislators, have been in their litigation efforts against Tesla.

I won't even drive past a dealership anymore.

jordanrichard | 2019年2月1日

Actually I am fully aware because I live in CT and have been involved with the legislative effort for the past 4 years to change the laws here to allow Tesla in. Our local dealer association had set up a website to perpetuate the notion that Teslas are fire traps. They were then order to remove the website.

So I do have an idea of what is going on. You are also no reading/listening to what I am saying. My idea would be a way for the dealers to still stay in business IF they did in fact cleared their lots of ICE vehicles. Until the cost of an EV to a dealer is less than present cars, selling/servicing EVs will generate less money. So I expect some dealers to just give up and close since there won't be as much money to be made in EVs.

jerrykham | 2019年2月1日

I just think it is funny that someone with the handle @Blue Adept would mention avoiding "depravity". I've probably read at least as much Piers Anthony as you have Blue if not more - and that guy is definitely depraved. Although the Apprentice Adept series didn't show it as much as say the Xanth series does. What can I say, I love the puns...

blue adept | 2019年2月2日

And that's my point, @jordanrichard, as it's pretty damn clear that they're NOT going to capitulate and/or give up the pursuit of ICE transportation no matter what given that they've (the auto manufacturers, dealers, lobbyists, and petroleum magnates) a combined vested interest in maintaining the status quo despite whatever detriment to our continued proliferation/the welfare of Humanity.

It's as clear to me as it is to most everyone else here and why you, who claims to have an awareness of the struggle from an insider's point of view, insist on not realizing this fact is beyond me.

Don't get me wrong, I appreciate your efforts to find some sort of middle ground and/or a workable medium and/or a consensus, but it's just not possible and your own alleged experience should've provided you with the necessary insight to reach the same conclusion.

I can see no way forward for dealerships other than their demise and/or obsolescence, especially given the contrived nature of their origins.

Maxxer | 2019年2月2日

I would put a gym with included clothing. bench and weights. Treadmill, couple showers. You stop, bench a couple plates, run 5k. take a Bagel ne a coffee and get back on the road. You saved the planet, saved your body.
Market of the future

blue adept | 2019年2月2日

@jerrykham

I'm a longtime scifi-fantasy aficionado/nerd/geek, what have you, and admit that I've read only the first three books (a standalone series in their own right, that is, until Anthony decided to pen the other four) which were originally known as the Split Infinity trilogy, so I never really delved into any potential indulgences of depravity on Anthony's part.

I guess I got out while the getting was good, no "puns" intended.

Yodrak. | 2019年2月2日

Vested interests aside, it's going to be a long time before EVs become affordable enough to be a significant portion of new car sales, and longer still before they will be affordable enough to be a dominant portion of new car sales.

My thought is that one of the reasons why many new car dealers aren't interested in selling the EVs that their brand offers is that their clientele can't afford them. Some dealers are interested in selling EVs, and I think you'll find that such dealers tend to be located in more affluent areas. But even in affluent areas not all people are well off, and the dealers who compete on the basis of low prices and nobody is turned down for a loan aren't targeting people who can afford an EV.

blue adept | 2019年2月4日

@Yodrak.

Actually, there are a number of low-dollar EV's that new car dealers could be offering their clientele all across the spectrum of what is considered 'affordable':

Hyundai's Kona "SEL" series costs under $25k;

Smart's Fourtwo Electric Drive is also under $25k;

Ford has an electric Focus under $30k, as is Hyundai's Ioniq Electric and Nissan's Leaf;

Volkswagen's e-Golf is right at $30.5k;

Fiat's 500e is just under $33k;

Chevy's Volt, Honda's Clarity EV and Kia's Soul EV range from one end of the $33k price range to the other;

Chevy's Bolt is over $36.5k;

Hyundai has a Kona EV slated to be released in '19 at $37k;

BMW's i3 is almost $44.5k;

There's also the "used" EV market where you could pickup an EV for a cheaper price than even those listed here, so there's quite a range of options available to the frugally minded buyer, 'vested interests aside', so if you're not seeing them then it's because they don't want to offer them to the public-at-large.

blue adept | 2019年2月4日

EDIT:

There's also the Mitsubishi i-MiEV coming in at just under $15k, which makes it the cheapest EV by far.

jordanrichard | 2019年2月4日

blue adept, most of the vehicles you listed are only available in CA and/or in the other 9 states that follow CA's standards.

When we as a collective talk about what is available and give credit to OEMS for making their respective EVs, we should be focusing on what is available to every state. Before "joining" these forums in Nov 2013, I had never heard of an EV Toyota RAV-4, yet the talk on here was as if it was common knowledge. It is common knowledge in the CA bubble.

bp | 2019年2月4日

When there are revolutionary technology changes, the business relying on the old technologies either evolve or disappear.

Blockbuster disappeared when the market shifted from video tape/disk to streaming. They were able to make the transition from video tape to DVD, because DVD's were a change in media - not a change in how the videos were distributed. But when streaming showed up, there wasn't any reason for people to visit a physical store to get a video.

Netflix originally did DVD rentals - and they evolved moving from DVD rentals by mail to direct video streaming. In both cases, the distribution was essentially the same, customers ordered the videos online - all that changed was the delivery method.

First, even if EV sales take off rapidly, because vehicles have a long lifetime, the dealers will have many ICEs to service for years to come - it won't be as a rapid a change as video tapes/disks to streaming. So their service businesses will remain profitable and busy for many years.

But the model will eventually change. Tesla is starting that change now. 80% of the service of an EV can be done in a mobile van, without going to a physical service center - plus EVs should require considerably less service, allowing an individual service technician to support many more vehicles per year. Eventually the dealerships will likely be forced to make that transition too. Which will eventually mean fewer or smaller physical service centers.

It doesn't make sense for the dealerships to try finding other related businesses, like supporting EV charging. Blockbuster tried this for a short time by partnering with Radio Shack and putting a mini Radio Shack store in many Blockbuster stores - that didn't work - and now both companies have disappeared.

EV charging is a completely different business model. It will operate 24x7, and is relatively low revenue per customer - what's more likely is for gas stations, especially the mega stations like Bucee's in Texas to add their own charging stations - so EV customers can use their existing restrooms, retail and restaurants while charging their vehicles - plus EV customers may spend longer per charging station than an ICE re-fuel, so that could actually increase their revenue per EV vehicle.

Yodrak. | 2019年2月4日

"Actually, there are a number of low-dollar EV's that new car dealers could be offering their clientele all across the spectrum of what is considered 'affordable': ... "

Thanks for finding and posting those price figures. What are the sales figures for those cars? Should be pretty high at those prices, if the cars are at all desireable?

blue adept | 2019年2月5日

@jordanrichard

Last I checked you can buy ANY car from anywhere and have delivered damn near ANYWHERE in the world, or even go pick it up yourself and drive it back to your home state if you prefer, so I don't know what you're on about about some sort of "CA bubble" ?!

All the same, my point was that it was possible for pretty much anyone to do what they can to do their part to eliminate vehicle-related carbon emissions and make the world better for all in the process.

blue adept | 2019年2月5日

@Yodrak.

Part of the problem, I think, (other than the ongoing propaganda campaign against EV's) is limited availability caused by the lack of any dealer incentive, perhaps because they're focused on eliminating their stockpile of ICE inventory due to pressure from their manufacturers.

That's why you don't see dealer's lots full of EV's from this or that manufacturer, just the latest ICE models.

It's this element of 'on-hand' convenience, coupled with the manufactured appearance of a lack of availability, that dealerships rely on to make their ICE sales, though anyone can always choose to order an EV from the manufacturer independent of any dealership...There's nothing stopping anyone from doing that.

blue adept | 2019年2月5日

@bp

>>> "because vehicles [last] a long lifetime, the dealers will have many ICEs to service for years to come - it won't be as a rapid a change as video tapes/disks to streaming. So their service businesses will remain profitable and busy for many years."

True, and that inherent longevity is further prolonged with the release of each new model lineup/ICE vehicle rolled off the line at this or that ICE manufacturer, unfortunately.

blue adept | 2019年2月5日

@bp

>>> "because vehicles [last] a long lifetime, the dealers will have many ICEs to service for years to come - it won't be as a rapid a change as video tapes/disks to streaming. So their service businesses will remain profitable and busy for many years."

True, and that inherent longevity is further prolonged with the release of each new model lineup/ICE vehicle rolled off the line at this or that ICE manufacturer, unfortunately.

jordanrichard | 2019年2月5日

blue adept, no you can't simply buy any car from anywhere and have to delivered to anywhere. Again I will use the E-Rav 4 as an example. No Toyota dealer here in CT or any other state would touch it especially if it is under warranty. The E-Gulf is another example. It is only sold in 8 states so the other 42 states would have no clue on how to work on it.

My overall point is we shouldn't be giving credit to any OEM for coming out with an EV if they only make it available in 1 state or in states where it is mandated. If you look at the seemingly large number of EV models available, how many can be bought/owned in every state?

blue adept | 2019年2月5日

Alright, jordanrichard, now you're splitting hairs and introducing a 'qualifier' in the form of the availability of local servicing, but you do make a good point and have likely pointed out yet another method the ICE industry employs to curtail the mass-market adoption of EV's, like I touched upon with Yodrak. and bp.

A prospective EV buyer would likely have to contact the manufacturer, in advance, to express their enthusiasm for one of their EV models and discuss options and potential resolutions for servicing prior to purchase.

Hmm....