⚡️ September Dealer Digest ⚡️
Let’s Talk About Maintaining Gross in EV sales 💸
Dealerships have a unique opportunity right now to hold (or even increase!) gross profits by investing and focusing on building value in EVs. For the past 18 months, automotive has been engaged in an EV price-war on the new vehicle side (driven by Tesla slashing prices).
Before diving into strategies, let’s quickly define “Gross” and check out some data!
“Gross” or “Gross Profit per Vehicle” is broken out into:
Dealership gross profits reached record levels during COVID, but have recently come under some pressure. See the charts below and writing from Haig Partners:
While not currently broken out between ICE-Gross and EV-Gross, dealerships have spoken out about needing to heavily discount EVs in some instances in order to reduce days’ supply and move electric units.
At Lectrium, we work with our dealer partners to build value in EVs for their website visitors, and in-person shoppers. Ideally a great EV dealership will be able to move electric units quickly, while protecting front-end and back-end gross margins.
Protect your EV Gross Profits 💪
Here is list of ways we believe dealerships can attract more EV buyers and empower sales & finance teams to close EV deals at higher gross margins.
1) Enhance customer education around the benefits and total cost savings of EV ownership
Well-informed customers are more likely to see the value in an EV and pay a premium price. One easy way to educate your customers is through digital marketing tools, such as Lectrium’s badges, which help car shoppers see the financial savings available for each EV and PHEV in your inventory. From federal tax incentives, state rebates to fuel cost savings, VDP tools such as the EV Savings Badge, provide a simple and interactive way for customers to see the financial benefits, without you sacrificing gross.
For example, a sales manager or F&I manager can explain to an EV buyer how charging with electricity saves on fuel costs compared to filling up a gas tank. Electricity is much cheaper in every state and our tool helps explain this.
2) Better sales trainings for staff
Not only do customers need better EV education, but sales teams also need to be equipped with in-depth knowledge about EV technology, features, and benefits which differ from traditional vehicles. Training should focus on effectively communicating the long-term cost savings, convenience, and environmental benefits of EVs, helping salespeople build value and justify premium pricing.
Lectrium provides training sessions for sales teams to effectively integrate our tools into their EV sales conversations. Book a meeting with us to learn more about these trainings, and how we can help.
3) Add F&I Products for EVs
Consider adding F&I products specifically for EVs, such as extended warranties on batteries, coverage for charging equipment, or gap insurance to provide peace of mind for customers, while increasing your profitability per transaction.
Ultimately, there are a higher percentage of sales and lease deals happening in EVs right now, and “the back office may also find that consumers are more willing to add on various F&I products, such as extended service contracts.” - McKinsey
4) Bundle service packages for EVs
Find your “EV Partners” and offer bundled service packages specifically tailored for EV owners, such as charging station installations, charging credits, battery maintenance plans, and more. Thinking creatively and bundling service packages like these can add value for customers (especially new EV owners!) while generating additional revenue streams.
There are dozens of EV companies out there doing cool things and wanting to help you increase your margins. Do your research and find the partners that will build the most value for your business!
While the EV market has been tough to navigate the last couple of years, dealerships have ways of effectively maximizing gross profit on EVs and positioning themselves as leaders in this evolving landscape. The time is now. 🚀
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Lectrium Thoughts + Updates 💡
In case you missed it, we added an exciting new tool to our product suite this month: the EV Range Map!
The EV Range Map helps dealerships overcome customer ‘range anxiety’ right from their website. Add this tool right on your VDPs so that online customers can see how far each EV and PHEV in your inventory can travel on one single charge. And better yet, have your sales teams also use this tool during their sales conversations in-store for a better customer experience!
Check it out for yourself:
Addressing Relevant EV Questions on Your VDPs 💻
8.9% of new cars sold in the USA were electric in June 2024 - a record month! 🔥
As the number of EV sales continues to increase each month, how do you ensure your dealership is capturing more of those sales directly on your website?
While traditional automotive websites are good, they were built to sell ICE vehicles (and let’s face it haven’t changed in decades). Most dealership VDPs are still missing crucial information relevant to electric vehicles compared to EV competitors like Tesla, Rivian, or Lucid.
Check out how our dealer partners are already updating their digital marketing assets to allow EV shoppers to research EVs and answer relevant EV questions directly on their VDPs!
Committed to Our Dealer Partners 🤝
Lectrium is committed to making our dealer partners shine with effective EV tools designed to educate and empower customers and sales teams. Let’s bridge the EV communication gap, and convert more of your EV shoppers into EV buyers.
If you are an automotive dealer looking to learn more about our tools or simply ‘chat EVs’: book a demo here or email us at info@lectrium.io 🚘
September Events 🗓
In New York City this September? 🗽 Lectrium will be attending and have a booth at two events this month. We would love to meet you & learn more about your dealership!
Check them out here:
Hey 👋 new subscribers: Lectrium is an electric vehicle technology company creating digital tools to help automotive dealers sell more EVs, educate customers on the financial savings, and ease customer concerns during the car-buying process. We’re excited to have you here!
Electrifying Dealer Websites | CEO & Co-Founder at Lectrium | URBAN-X | Antler | NADA
3moHigh days supply for EVs has been well-covered. Another issue lurking in the background is gross profit compression in EVs, which is mostly impacting the front-end. Building value around EV inventory and addressing common objections head-on is the only option to turn inventory faster AND with better margins.