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How Rising Electric Vehicle Sales Will Impact Your Shop

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Aug. 28, 2017—Before July 2017, there was no urgency; shop owners were sidling around the issue; it wasn’t a problem that needed to be addressed until years down the line.

But on July 5, when his phone would not stop ringing, Craig Van Batenburg realized everything had changed. Hybrids and electric vehicles were no longer the “future.”

The future was now.

“The Volvo news put everyone into we-gotta-do-this mode,” he says.

Van Batenburg, founder of the Automotive Career Development Center, hybrid/electric vehicle (EV) training school, is referring to Volvo’s declaration that all models launched after 2019 would be hybrid or electric vehicles (EV), making the company the first major traditional automaker to set a date for phasing out vehicles powered solely by the internal combustion engine. And while Volvo isn’t the biggest automaker on the market (it sold 534,332 vehicles in the U.S. in 2016), Van Batenburg says it represents a trend we’re continuing to see from OEMs, who are promising shareholders and the driving public more EVs and hybrids in the very near future.

So, what does that mean for your shop? Well, that depends. The true impact requires a look through recent hybrid/EV news to determine what automakers are committing to and what regions it will affect.

 

The Tipping Point

The pressure for OEMs to embrace EVs and hybrids began in July, when Tesla’s long-awaited Model 3 went on sale for the masses. Tesla said it had taken 325,000 Model 3 reservations, more than triple the number of Model S sedans Tesla had sold by the end of 2015. These reservations represent potential sales of over $14 billion.

While the Volvo news certainly wasn’t the only significant bit of hybrid/EV news to occur recently, it was a tipping point in a year where hybrids have seen a 40 percent sales increase, plug-in cars have seen a 89 percent sales increase, and fully electric cars have seen a 134 percent sales increase over 2016.

And remember: 2016 was a year where 159,000 new EVs hit the road, and sales were up 38 percent over 2015’s numbers. Your shop can expect models from certain automakers that are leading that pack (see the table below).

According to the U.S. Department of Energy’s Alternative Fuels Data Center, nearly 4 percent of all vehicle sales are hybrids; that means they’re more prevalent in the U.S. than vehicles from Kia (3.6 percent), Subaru (3.3 percent), Mercedes-Benz (2.1 percent), Volkswagen (2 percent), BMW (2 percent), or Audi (1.2 percent).

Van Batenburg says to look no further than Europe to see how quickly EVs can take over the market. Nissan expects that zero-emission cars will make up to 20 percent of its sales in Europe by 2020, and Toyota’s latest sales figures show that 40 percent of buyers pick one of the brand’s electric cars.

 

2017 EV Sales

Here are the models selling the most so far in 2017.*

Model

Number of Units Sold

Tesla Model S

11,195

Chevrolet Volt

10,932

Toyota Prius Prime

9,692

Tesla Model X

8,945

Chevrolet Bolt EV

7,592

Nissan LEAF

7,248

Ford Fusion Energi

5,057

Ford C-Max Energi

4,409

Fiat 500e

3,828

BMW i3

2,992

*Data pulled from Inside EVs.

 

Location Matters

In 1999, the Clean Air Act was renewed, signifying the EPA doubling down on emissions regulations.

But, to California? That wasn’t enough, and the state won a lawsuit against the EPA that went all the way to the Supreme Court. This created the California Air Resource Bureau (CARB), which allows the state to regulate its own air quality.

Seemingly this only affects one state, but CARB is actually “more powerful than the EPA,” Van Batenburg says, and its influence has begun to spread across the U.S.—especially in the Northeast. In 1995, Massachusetts signed an agreement with the California governor, promising to match any emissions standards passed by California. Today, that agreement has spread to all of New England (minus New Hampshire).

While this means coastal states, including Washington, Georgia and Florida, are dominating EV sales, many inland states are beginning to follow suit, like Utah, Kansas and Pennsylvania (see the table below).

 

EV Sales by State

These are the states experience the most EV sales and growth in 2016.*

Total EVs in Operation

Largest EV Growth

  1. California
  1. Utah

2. Georgia

2. Nevada

3. Washington

3. North Carolina

4. Florida

4. Colorado

5. Texas

5. Kansas

6. New York

6. New Hampshire

7. Michigan

7. Pennsylvania

8. Illinois

8. Virginia

9. Oregon

9. Florida

10. Arizona

10. Arizona

*Data pulled from Nanalyze.

 

The Opportunity

In fact, Van Batenburg is sure the influence has even spread to Alabama, where shop owner and past Ratchet+Wrench feature Brian Ordway is thinking about the future. Even though the hybrid count is low in his area, he’s looking to take advantage of an untapped market and stand out as the go-to hybrid repair shop.

And, really, that’s Van Batenburg’s main pitch to automotive repair shops; if you don’t live in one of the coastal states where EVs are prevalent, you now have the opportunity to set yourself apart.

“[Ordway] discovered that if he wants to be part of the future, this is it,” Van Batenburg says. “He’ll be one of the only guys in Alabama trained to repair hybrids, and he’ll pull in cars from hundreds of miles away.”

 

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