The Hybrid Shop's New CEO Discusses Company's Future
In 2013, former shop owner Matt Curry sold his 10-shop operation in Virginia to focus full time on growing The Hybrid Shop (THS), the company he founded to help the industry transition into a new era of auto repair and service.
Hybrids and electric vehicles (EVs) are slowly but surely becoming a significant part of the auto industry in the U.S. There was a 25 percent increase in total sales from 2016 to 2017, and 2018 seems ready to easily top that. Even though hybrids only took up 2 percent of total vehicle sales in 2016, sales have grown consistently and continue to do so.
The Hybrid Shop (THS) started with a simple franchise-based model. Businesses paid a fee to partner with THS and were provided with a turnkey program allowing them to service alternative-fueled vehicles. Additionally, they were promoted by THS’ marketing team and received an exclusive territory to remove competition.
However, the Currys experienced a legal dispute with their technology provider in 2017, which, in addition to several other issues, led to the program capping out at nearly 40 shops and the Currys selling the company to Martin Kruszelnicki, also the former owner of 405 Auto in Santa Monica, Calif.
“Hybrid and electric vehicles are the future … and the future is here already,” Kruszelnicki says.
After taking over THS, Kruszelnicki has completely revamped the company. Ratchet+Wrench recently sat down with Kruszelnicki to discuss the program changes and why he believes his tenure will have a different result for shops questioning the viability of EV repair.
How did your role as CEO come about?
The Hybrid Shop was an amazing concept. However, in my opinion, the right technology wasn’t there yet at the time when I joined in 2012. They had marketing efforts to drive traffic and technical support, but I guess it wasn’t enough to generate the expected growth.
I had been remanufacturing batteries for over 10 years and thoroughly understood the technology. The equipment and process I designed was far superior for remanufacturing and diagnostics. My family has controlling interest in an electronics manufacturing company in Europe where we design and build battery remanufacturing equipment, among other diagnostic aids and devices, including proprietary software. THS now owns several pieces of intellectual property and are self-reliant, which is a key advantage over the previous owners.
Understandably, shops could be wary, given the trajectory of the program over the past five years. Why is the new setup better poised for success?
Once again, this comes down to technology, products, and business model. We own and control the equipment manufacturing, we offer exclusive products, we have our own training and marketing, and own battery remanufacturing. Our new business model is fairly easier and more profitable for both dealers and franchisor and allows for growth in many categories.
Previous THS dealers found the old program profitable and future-proofing in general, even with its limitations. The new THS has a much broader offering that will further enhance shops, and generate more profit and value for businesses. There are many changes happening in the aftermarket automotive repair business. Having control over all core components of The Hybrid Shop franchise is key.
What are your goals with The Hybrid Shop?
We are looking to grow the number of businesses significantly and to grow our network. There are over 5 million hybrid and electric vehicles on the road right now that are out of warranty. We want to target these customers by building a reputation and branding and by offering an alternative to OEM dealers.
We have 462 total inquiries to join our program and will start considering applications in late September. The Hybrid Shop’s primary goal is to provide education, unique products, and to grow together with our dealers. We want to have the THS brand associated with the highest quality products and the best customer service and warranty.
In addition, a positive impact on our environment is an amazing benefit to all of us.
How does THS’s program work now, and what equipment and technology is used?
Our new system using battery remanufacturing machinery is completely automatic. Processed battery module selection is based on several parameters done by an algorithm. This way we can ensure that we produce a high-quality product that is plug-and-play and reliable. THS will supply all dealers with replacement battery packs and more.
In parallel, THS engineers are working on replacement battery packs with higher capacity, plug-in conversion kits, and other unique products—all to achieve better mileage, help save the environment, and let our dealers make a profit while keeping customers happy at the same time. All products will be available exclusively through the THS dealer network.
What’s the cost to become part of The Hybrid Shop’s program?
The cost is much less than it was with the previous program. It costs about $16,000, compared to the former price of $60,000. This covers onboarding, joining the program, a dedicated website, diagnostic tools, basic training, and much more.
How is training conducted for the program, and by whom?
When a shop first joins THS, it sends its technicians through a basic training program. They are trained in how to diagnose, how to understand, and how to work safely with high-voltage vehicles.
We have one training center in the Los Angeles area where the classes are held. We are working on getting a second location on the East Coast, in order to make it more convenient for the shops in that area.
The THS team is also working on several advanced classes allowing our technicians to understand several components of modern hybrid and electric vehicles.
How many shops are in the program at the moment? Is there a maximum number of shops that can be in the program?
We inherited a network of 36 dealers, but we currently expect to have about 30 well established dealers in the program. There is no limit to the number of shops that THS will accept in the program, as long as the protected territory and the car count will be sufficient for a given location.
We are planning international expansion at some point, but in the U.S., we aim to have about 400 locations by 2021.