Franchise dealers anticipate spending $5.5 billion on new infrastructure to sell EVs, according to the National Automobile Dealers Association (NADA), a trade group of auto dealers.
The estimates are “based on available data from a selection of brands,” according to a NADA press release. Several automakers have asked dealers to invest in chargers and other upgrades to sell EVs, but NADA did not break down its overall estimates by each brand, or specify a timeline for spending.
Each brand is asking dealers to invest anywhere from $100,000 to $1 million, according to the group, and costs “do not necessarily include the purchase of special equipment needed to repair an EV or the extra costs from local utilities to extend new power lines or add transformers.” to support EV charging.
Dealer franchises have over time become part of the backbone of regional and small-town economies. According to NADA, there are 16,773 franchised dealers in the US today, and they create nearly 2.3 million jobs, paying an average of nearly $89,000 annually.
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To put the scope of the $5.5 billion estimate cited by NADA into perspective, the 2021 federal infrastructure bill commits $7.5 billion to a nationwide network of 500,000 EV chargers. Such a development represents more than tripling the number of charging stations in the country when the bill is passed in November 2021.
Most automakers have set charging hardware requirements for dealers. Since EVs started arriving on sluggish demand, then became a hot item, most dealers have weathered the upgrade vs. upgrade debate. obsolescence.
That opened up some division between brands—with EVs being offered at more Kia dealerships than Hyundai stores, for example, as Kia set up its dealerships and enforced faster-charger hardware requirements. NADA has been pushing its dealers to talk about charging — and it may also drive some of these initiatives directly from dealers.
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In some cases, automakers take the terms beyond charging an investment. General Motors has asked its dealers to deploy destination chargers in the community, while taking part of the bill, but has also asked its Buick and Cadillac franchises to commit to EV-only sales in the near future. Those who did not participate were offered a purchase.
Ford dealers will no longer be able to raise EV prices or haggle over prices starting in early 2024. With that part of the buyer relationship not being so for sale, Ford is betting that it will generate greater loyalty to dealers.