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Dealerships are a tipping point

Springer Nature by Jennifer Lynes June 2018

There was a time when one in three cars on the streets of New York City was an electric vehicle. The year was 1900. The popularity of electric vehicles (EVs) would continue to grow over the next decade. Considered a luxury car at the time, EVs were easier to drive, less noisy and had elegant interiors. However, by the 1920s EVs were no longer a viable commercial product. Ultimately, the high cost, low top-speed and short battery range of EVs could not keep pace with the introduction of the mass-produced internal combustion engine of the Ford Model T. Fast-forwar100 years and many of the barriers to the wide-spread adoption of EVs remain largely the same, despite tremendous technological progress. While Elon Musks Tesla Roadster literally orbits in space around us, on the ground, adoption of EVs is still constrained by a multitude of barriers. Writing in NaturEnergy, Gerardo Zarazua de Rubens ancolleagues address a largely unexplorebarrier to EV adoption — the point of sale — and find that sales personnel at car dealerships often discourage shoppers fropurchasing an EV. Overcoming this barrier will be a vital step if the global goal of 100 million EVs on the road by 2030 is to be achieved.

A key indicator of whether a particular technology or innovation will succeed in the mainstream market is whether it can cross the diffusion of innovation ‘chasm
(the point at which the innovation moves from the stage of ‘early adoption’ to ‘earlmajority). Until recently, the prospects foEV adoption looked rather bleak. Howeverbetween 2014 and 2015 the global stock of EVs doubled. After many years of rather flat growth curves, this is impressive, and yet this 100% growth rate puts the recent global stock at just 0.15% of the 1.4 billion cars othe road. In absolute numbers, the leaders in EV sales are China and the United States; in relative terms, Norway is the closest to bringing EVs to the mainstream. By the end of 2016, 5% of all registered passenger cars in Norway were plug-in electric vehicles (PEVs), and one-quarter of sales of new vehicles are PEVs.
However, these statistics dont tell the whole story. EV adoption in places like China, Norway and the United States (wherhalf of all EV sales are in California) ardriven by policies that strongly encourage EV adoption. For example, in Norway policy choices mean that the cost of purchasing an EV is subsidized, and EV drivers have access to bus lanes and enjoy free parkingBut how do we encourage EV adoption in places without these compelling policies? It is in this context that the information and interaction at the point of sale plays a fundamental role. Though it is well-documented that high-cost transactions such as purchasing a vehicle are strongly impacted by the interaction between the consumer and sales personnel, little is known about what type of information is being conveyed to customers when they arlooking to purchase an EV.
Zarazua de Rubens and colleagues’ study provides much-needed insight into this area through an extensive mystershopping exercise that spans 15 cities in five Nordic countries. By quantifying their experiences as potential customers and recording key quotations frosales personnel, Zarazua de Rubens and colleagues demonstrate that sales interactions are unlikely to result in Epurchase because sales personnel ardismissive of EVs, provide incorrect information and strongly orient customerto other options. This approach icomplemented by 30 interviews with leading industry experts, which corroborate the observation that dealership sales strategies are influenced by signals froindustry and policy. Several geographical differences were noted between the fivNordic countries. For example, in Denmark and Norway dealer performance was lowest and highest, respectively.
The study by Zarazua de Rubens et al. complements a small number of existing studies on the role of dealerships in the North American market, which also identify barriers such as sale personnellack of knowledge or misinformation apoint of sale. One study also found that a lack of EVs on site at dealerships was problematic; the willingness to purchase a high-cost vehicle without being able to experience it first-hand will dissuade all buthe most enthusiastic of  purchasers. This finding prompted the launch of the worldfirst ‘Electric Vehicle Discovery Centre’ in Toronto, Canada, which provides an opportunity to test drive a range of EVs and get questions answered by on-site experts.
More importantly, the study by Zarazua de Rubens et al. presents an importanopportunity to not only consider the barriers faced by consumers in the EV purchasing transaction, but also the barriers faced by dealerships. Tesla aside, most EV models are co-located at dealerships that alssell internal combustion engine vehicles.
Zarazua de Rubens et al. found that sales personnel require specialized training in EV sales to increase their knowledge anunderstanding of the technology — and not just related to the functionality of the vehicle but also the available policy incentives and charging infrastructure. Combine this with the fact that an interaction with a customer interested in EVs can take two to four times longer than other transactions, and the incentive for sales personnel to focus the
customers attention on EVs becomes much less appealing. While an added benefit oEV technology for the user is a substantiareduction in routine maintenance and repairs, this also represents a further disincentive for the dealer to promote EV technology because they rely heavily oincome from repairs and maintenance as part of their revenue model.
There is clear evidence that EV policies can have a substantial impact on the adoption of EVs. The study by Zarazua de Rubens et al. indicates that we need to turn
our attention to developing ‘pull’ policies for dealerships to stay on track for large-scale adoption of EV technology.
Jennifer Lynes,  School of Environment, Enterprise and Development, University of Waterloo, Ontario, Canada.