5 Findings from Dealership Survey on EV Sales

In states with electric vehicle sales mandates, automakers must deliver a minimum number of EVs, and dealers must sell them. How are dealers responding to this EV push?

The automotive market is changing rapidly in the United States. Electric vehicles (EVs) are gaining in popularity. Sales mandates in 10 states are increasing the adoption of EVs. As a result, dealerships and automakers will need to adjust their sales strategies to meet the needs of EV consumers.

My current research on this topic seeks to better understand how the dealerships are responding to EV growth in the automotive market. I surveyed dealership managers on the phone and in person at the National Automobile Dealers Association’s annual conference in Las Vegas.

The research uncovered five key findings:

1. Dealers Know about the EV Sales Mandates

In our survey, dealers in states with EV regulations unanimously knew about the regulations.

Dealership managers understood that these policies require increasing in EV sales and will result in more EV inventory from automakers.

However, 42% of dealerships still had not heard from automakers about the impact the regulations would have on inventory or expectations on how many EVs the dealer would be expected to sell.

2. Dealers Are Not Aware They Have a Problem

Overwhelmingly, dealership managers dismissed that they have a problem selling EVs, contradicting a study conducted by Ipsos RDA, a global market research firm.

In the mystery shopping study of the ten largest EV markets covering 141 dealerships, Ipsos RDA found that dealerships were not prepared for the coming wave of EVs.

Salespeople steered interested EV customers toward traditional gas-powered vehicles and lacked information to help customers make informed choices. “This lack of support for the EV shopper lessens the likelihood that they will make the decision to go electric,” said Todd Markusic, vice president of research at Ipsos RDA.

The Ipsos RDA study also highlighted that dealerships across the country often failed to provide test drives of EVs, which would help demonstrate the benefits of the new technology.

Despite these issues, dealerships I spoke to dismissed that they had any problem selling EVs. One dealership owner said, “It’s up to the automaker to provide a product the customer wants.” And another dealership said, “We can sell anything on our lot.” A third stated, “We are not worried at all about our ability to sell electric cars.”

3. Dealers Are Relying on Automakers to Meet Regulations

Dealerships are relying on automakers to take the initiative to increase EV sales volume. In total, 46% of dealerships stated that they would rely on automakers for advertisements, discounts, or subsidies, to help sell more EVs.

Only 15% of dealerships have increased or plan to increase training for salespeople to be more effective at EV sales.

One common theme I heard from dealers is that they were simply not concerned or worried about the EV sales requirements, with one saying, “It’s the automakers’ problem.”

4. Dealers See EVs as an Afterthought

Nearly every dealership I spoke to indicated that EVs are not their core market. This is no surprise, because EVs only represent approximately 1% of U.S. automotive sales.

Dealerships in California (69% of respondents) said EVs accounted for approximately 6% of their total sales volume, but still saw EVs as not a priority (our survey respondents had slightly higher EV sales than the Golden State’s total EV sales volume of 4.8%).

5. Dealers in California Are Seeing High Demand and Low Inventory

Dealerships in California cannot maintain inventory of EVs on their lots for long, indicating higher demand for those vehicles in the state.

I was told by one dealership in California that the average days in inventory for EVs was approximately one to two weeks, versus 60 days in inventory, on average, for an ordinary gasoline car. Another dealership stated that there was a waiting list of customers for the newest EV model.

I did not receive similar results from dealers in EV mandate states outside of California. 

Gabe Elsner heashot

Gabe Elsner

The Wharton School
Gabe Elsner is a Wharton MBA student at the University of Pennsylvania and the founder and CEO of ZEV.