You’ve heard it before: an electric vehicle takeover is inevitable. VW argues the pandemic has only sped up the race towards EV, while others say it’s all hype with no statistical backing. A Forbes analysis suggests exponential growth will render combustion engine vehicles obsolete sooner than we might think and this Bloomberg New Energy Finance report predicts electric will surpass gas vehicle sales in 2037. While the jury seems to be out on exactly when and how electric cars will take significant hold in the market, the general consensus seems to be they will take hold, and we do need to prepare to adapt. For parts departments, this would trigger massive disruption for current business models. Today we explore how.
Electric vs Combustion Parts
Electric vehicles have 3 major parts while the average combustion engine has around 30,000. Now in all fairness, that number is a bit misleading. Although an electric-powered car has three primary components (the electric engine, motor controller, and battery) there are many more parts required to make cars roll. From the many components of those 3 parts to basic functions like wheels, steering. and climate control functions, there are far more parts and service opportunities in an electric vehicle than just 3. Albeit, still far fewer than combustion engines. Electric vehicles are also by nature newer, meaning computerization is a given in diagnostics and repair. Future cars are likely to be more circuit boards than nuts and bolts, changing the way technicians interact and parts departments operate.
During the transition, inventories will become more complicated than ever balancing the parts and technicians for both vehicle types. Dealers will need to prioritize inventory health in order to keep their capital liquid and make the hires necessary to balance the different markets. As EV shifts to 50% or more of business, parts departments will start being faced with a new decision: continue to balance the two or jump ship and follow the momentum towards EV. Those who decide early will have the advantage in simplification and focus on providing the best service for EV’s, while those who stick will support the consistent market of older repairs and combustion engine die-hards until it dwindles.
Eventually, if electric-powered cars completely take over, combustion service and repair will be left to that of a hobbyist market. With fewer parts to stock, dealership inventory health will be simplified and streamlined. Simply not having a part won’t be an option and at the same time, dealers will need to keep their inventory lean to prioritize spending on hires for new roles of developers and software engineers- much more akin to an Apple store than your classic mechanics.
What do you think? How will electric car sales impact parts departments? Leave a comment below!
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