Electric vehicles could upend the traditional parts and service business dealers rely on for profits.
EVs have roughly 40 percent fewer parts than internal combustion engines, meaning 40 percent fewer opportunities to repair a broken part. Beyond that lost opportunity, dealers will have to invest heavily — $8,000 per store — to install the proper equipment to handle new EV technology.
But Frederiek Toney, vice president of Ford's Customer Service Division, says there's a simple solution to offset the potential cash drain: a better focus on customer service.
"It's going to be all about satisfying the customer," Toney said at the J.D. Power Automotive Summit here Thursday.
That includes making the necessary investments in facilities and recruiting skilled technicians to give customers reasons to return to the dealership. Retaining more customers and increasing market share could help offset any losses, he said.
Toney said there will likely be more service opportunities for EVs than people realize.
Many will be used in fleets, which rack up miles at a faster pace than personally owned vehicles. That means more opportunities for new tires, wheel alignments, brakes and other repairs.
He said parts and service represented $800 billion in global revenue for dealers in 2018. Despite the expected introduction of dozens of new EV models in the next few years, he said that number will jump to more than a trillion dollars in 2028. In the U.S. alone, it's expected to rise $30 billion, Toney said.
