According to Experian, the electric vehicle market share continues to rise sharply, from 3.1% in 2021 to 5.6% in 2022. Dealerships sold five times as many electric vehicles last year as in 2020, said the National Automobile Dealers Association, citing Wards Intelligence data. Current year sales are expected to increase as well.
All this should encourage auto retailers to ask, "How do we handle used EVs?"
Rapid Recon recently completed a study into reconditioning practices for EVs. Beyond discussing EV battery disposal, we learned there has been little formal initiative to determine how used EVs will affect automotive retailers. Here are the key conclusions from our research:
Whether to replace the battery pack will be the most significant EV reconditioning decision facing dealers.
Tires will be one of the most often replaced items for EVs, while brakes should have a much longer life.
EV propulsion systems have few moving parts and will be relatively low maintenance.
Used EV prices are at a premium level today but will drop significantly as new models enter the market.
Government incentives will create two classes of used EVs over $25,000 and below $21,000.
Those above $25,000 will likely present an opportunity to profit on lower mileage used EVs; those below $21,000 are likely to be scrapped as soon as the original battery pack needs to be replaced.
As for reconditioning, whatever the propulsion system, two foundational truths must be core to understanding key performance metrics, Days in Recon (ADR) and Time to Line (T2L). ICE performance history provides valuable experience for benchmarking EV recon best practices.
Reconditioning questions to consider:
How can dealers overcome the current tech shortage to train qualified EV technicians?
How will the battery pack and its life expectancy impact used EV values, used EV scrap, and dealer reconditioning efforts?
Will EV tires and brakes have shorter than expected life spans because of battery weight?
Will used EVs remain a premium product, or will prices begin to drop?
How will government incentives impact used EV pricing?
What are consumer expectations for transparency related to used EVs, and how can Rapid Recon help?
Our soon-to-be-released report, Used EV Reconditioning Implications for Auto Dealers, discusses technicians, battery life, tire wear and tear, regenerative braking, and reduced parts.
A significant learning curve will be necessary for many consumers to understand the range and charging issues and differentiate EVs from ICE vehicles. This mystery will only heighten as EVs come back as used vehicles.
Fortunately, modern vehicle reconditioning platforms today enable dealerships to capture reconditioning materials lists and costs for the makes, models, and years it reconditions. This data, when captured and reported to the sales and used vehicle directors, present them with additional compelling information for their pricing strategies and to educate customers and build trust in the used EVs they may consider buying from the dealership:
Knowing typical reconditioning costs by vehicle enables used car managers to accurately calculate forward-facing reconditioning investments on these vehicles – this is valuable data for trade-in and auction appraisers and buyers to fine-tune offers.
Presenting to consumers details on critical reconditioning investments the dealer has built into the asking price helps build value in the vehicle for the performance, safety, and visual appeal the reconditioning adds to the car's market appeal and value.
Trust is established when dealer transparency is forthcoming – and trust is pivotal to the purchase.
By 2025, over 100 EV models are expected to be on the market and available to US customers, according to EV website electrek.co.
How these vehicles hold their resale value will be essential for automotive retailers. Specifically, about EV reconditioning and remarketing: How much to invest in any used EV?
About Rapid Recon
Reconditioning workflow automation from Rapid Reconis the industry standard in time-to-line inventory turn and speed-to-sale vehicle revenue enhancement for automotive retailers. Benchmarking data based on 13 million vehicles processed uniquely positions Rapid Recon to advise dealers on how to improve their store’s profitability. Used by more than 2,000 dealerships, Rapid Recon ensures the accountability of processes, property, and people. Hence, dealers know answers quickly, find assets anywhere, and sell vehicles promptly to grow dealership profitability. www.rapidrecon.com CALL US: +650-999-0497
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OUR EASY-TO-USE CLOUD-BASED APPLICATION CAN BE CUSTOMIZED TO ACCOMMODATE AND IMPROVE YOUR CURRENT WORKFLOW PROCESSES. THIS INCLUDES QUICK UPDATING TO MEET YOUR CHANGING NEEDS. FROM THE VERY FIRST DAY, YOUR PROCESS PERFORMANCE CONSULTANT WORKS WITH YOUR STAFF TO MAKE SURE YOUR SYSTEM DESIGN MEETS YOUR DEALERSHIP'S SPECIFIC REQUIREMENTS. WE THEN PROVIDE ONGOING TRAINING AND FEEDBACK TO HELP YOU REACH YOUR TARGET TIME-TO-LINE (T2L®) PERFORMANCE GOALS.