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Driving Change

Getting U.S. car dealerships on board the EV train

Volkswagen's ID.4

Since the days of General Motors crushing EV1s and Tesla's dealer battles, auto dealerships have represented a substantial barrier to EV car sales. Many have been a skeptical and uneducated interface to a car buyer's first experience with electric transportation. 

But now that electric cars are expected to start taking off, will auto dealers finally get on board? 

Volkswagen and its U.S. CEO Scott Keogh are planning on it.

A few weeks ago, the American division of the global German automaker began delivering the first substantial volumes of its electric SUV ID.4 to showrooms across the U.S. with the goal to have at least one at every VW dealer in America. "We're quite proud. We want this to be a 100 percent nationwide launch with over 650 dealers," said VW's Keogh in an interview. 

To combat the historic dealer problem, VW wanted to "fully attack and address this challenge full stop," Keogh said.

As a result, VW has laid out specific criteria for dealerships selling ID.4s. These include requirements that they must contribute to spending on ID.4 advertising, hire at least one "EV evangelist" on staff, deploy charging infrastructure on site and enable online reservations for the cars. 

Two years ago, VW built an EV working group with dealerships and began to determine what would need to happen to get dealers in the game for the upcoming launch of the ID.4. "We're not naive. For years, dealers have been cynical about electrification," Keogh said.

The dealer problem historically has been so intense that when Tesla wanted to launch its Model S electric sedan back in 2012, the independent EV pioneer built out its own stores to educate consumers about both EVs and Tesla cars. The dealer lobbyists pushed back on those plans, saying Tesla couldn't do direct sales of vehicles through its stores in states such as Texas and Michigan. (Tesla more recently shifted more aggressively to online sales and away from brick-and-mortar sales locations.)

But the anti-electric sentiment has started to change as Tesla has grown and found success with some of its models. And now with major automakers — from Ford to GM to Volkswagen — investing in big electric model launches, such as the ID.4, the dealer pushback looks as if it'll start softening in some regions including California, which plans to stop selling new internal combustion cars by 2035. 

There likely still will be some internal combustion engine dealer holdouts. Some VW dealers — although not many — opted out of VW's guidelines and aren't taking ID.4 orders through their dealerships, Keogh said. 

But with this new dealer engagement strategy, and VW's unprecedented nationwide ID.4 launch, dealers finally could start playing a much stronger role in getting EVs into the hands of consumers. Hopefully, such efforts will usher in an era where the dealer switches from an EV barrier to an EV asset.

VW's Keogh is expecting major growth in EVs in the U.S. this year. "We see the potential for EV sales to double this year. We’re optimistic that this is a turning point year for electric vehicles."

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