US Auto Dealerships Are Bad at Selling Electric Vehicles, Study Finds

U.S. electric vehicle sales have already set another annual record in 2017, with nearly 174,000 plug-in cars sold through November. But how much stronger would sales have been if dealerships aggressively pushed EVs?

Earlier this fall, market research firm Ipsos RDA sent mystery shoppers to 141 dealerships in America's 10 largest EV markets to document the EV sales experience. Save for Tesla -- whose sales staff “exude a passion for electric vehicles and are equipped with the information needed to help consumers make informed choices” -- the surveyed dealerships received less than glowing marks.

The study documents a litany of issues at traditional brand dealers. Mystery shoppers largely encountered a “passive” process. Dealerships hadn’t customized the sales process for EVs. Electric cars often weren’t available on the lot to view or to test drive. EV ownership information, via sales staff or marketing materials, both in-store and online, was lacking.

The sales process was “wrought with inconsistencies.” From one dealership to the next, even within the same brand family, one salesperson might be knowledgeable and eager to help shoppers find the right EV, while the next might be woefully unprepared to educate customers about plug-in cars.

“The biggest takeaway was that there as just a lot of inconsistency,” said Mike VanNieuwkuyk, senior vice president of Ipsos RDA, in an interview. “There aren’t standards or processes that are implemented and communicated across the brand.”

Worse, pushed outside their comfort zone, sales staff regularly reverted back to what they know: selling conventional gasoline cars. With on-the-lot EV inventory scarce, and salespeople reluctant to search for or order an EV, mystery shoppers were often steered toward a hybrid or a traditional gasoline vehicle.

“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, in a statement. “It is surprising that consumers often were not offered an EV test drive, a key experience that showcases the uniqueness of its performance benefits. Most of the time the consumer had to request one.”

Ipsos findings mirror earlier Sierra Club survey

Findings in the Ipsos RDA survey match those in a larger Sierra Club survey published in August 2016. For that report, Rev Up EVs, volunteers visited 308 dealerships across 10 states to inquire about EVs.

“Ranging from not carrying electric vehicles on the lot, to insufficiently charging them for test drives, to not featuring them prominently, to not informing customers of charging capabilities or tax incentives, it’s clear auto dealerships and automakers need to be doing much better to promote and sell electric vehicles,” said Mary Lunetta, co-author of the report and the Sierra Club’s Electric Vehicles Initiative campaign representative. 

“While automakers may claim their low electric-vehicle sales are a result of low demand, the Rev Up EVs report shows automakers and dealerships often aren’t doing their part to sell them,” added co-author, Gina Coplon-Newfield, the Sierra Club’s Electric Vehicles Initiative director.

“While some of our Rev Up EVs survey participants found dealerships are employing impressive best practices to sell a lot of EVs, many encountered roadblock after roadblock in their search for EV inventory, test drives, and knowledgeable salespeople," she said.

How to nudge salespeople to push EVs?

So, what can be done to incentivize dealerships and sales staff to push EVs? Two years ago, Connecticut launched the first statewide program offering EV rebates at the point of sale. Residents can receive a rebate of up to $5,000 for eligible battery electric, plug-in hybrid electric, or fuel cell electric vehicles.

The program also includes a carrot for dealerships: a $300 incentive for each rebated vehicle. According to a Center for Sustainable Energy report, “The dealer incentive has been ‘moderately to very important’ in convincing dealers they can make a reasonable profit on EVs, motivate their staff to sell electric cars and spend the time required to submit rebate applications.”

However, the report also found that nearly 70 percent of dealerships did not share the $300 incentive with sales staff. In response, the authors recommended that the program adopt a split incentive: $250 each for the dealership and salesperson.

A bill recently floated by an Oregon lawmaker would do just that. In January of this year, State Rep. Phil Barnhart introduced legislation that would allocate $1 million to provide salespeople with a $250 bonus for each EV sold to Oregon residents.

One looming threat overshadows state-level policy improvements, however. Republican tax legislation that passed the House last month would repeal the current $7,500 federal tax credit for electric vehicles. The Senate GOP tax bill, which passed on Dec. 2, retains the EV credit. Negotiators at the conference committee must reconcile the difference between the two bills.