Dealer Association Chair: Relax, Critics - Electric Car Owners Still Have to Visit the Shop

Steph Willems
by Steph Willems

National Automobile Dealers Association chairman Wes Lutz doesn’t have much time for critics who claim traditional car dealers don’t want to sell you an electric vehicle. As EVs boast fewer moving parts and lower running costs, green car advocates often say dealerships view the vehicles as a threat to a business model that relies heavily on service visits for profit.

Not so, says Lutz. The parts that do move are the ones they profit from.

Speaking at an Automotive Press Association event in Detroit, Lutz, who runs a Chrysler Dodge Jeep Ram dealer in Jackson, Missouri, threw cold water on critics’ assertions, Wards Auto reports. Fiat Chrysler, of course, is not known for its love of electric vehicles.

“First off, I don’t make money on oil changes,” he said. “And these days, vehicle are going 7,500 miles between oil changes anyway. Try to make money selling $30 oil changes that cost $40 in goods, labor and overhead. Unfortunately, you can’t make that up in volume.”

Continuing with his internal combustion tangent, Lutz said, “I haven’t made my living on engine or transmission work on vehicles I’ve sold new in more than a decade, and neither has any other franchised dealer.”

The revenue flowing into this store via the service shop comes mainly from tires, brakes, suspension work, alignments, and electrical work, he claimed — maintenance that’s unavoidable on electric vehicles. Nor does Lutz believe EVs have lower drivetrain maintenance costs compared to ICE cars, as he hasn’t seen any studies to back this up. “It sort of sounds true,” he admits. It’s still a fledgling market, and most owners of (until now) relatively low-ranged, non-Tesla EVs haven’t accumulated high mileage.

Still, battery degradation isn’t often talked about, mainly because instances of depleted packs are not as common as initially feared. Both the Nissan Leaf and Chevrolet Bolt carry eight-year, 100,000-mile warranties on their battery packs, with some differences between the two coverage plans. It will be interesting to see what widespread, long-term use of the larger-ranged second-gen Leaf and the Bolt leads to in terms of replacement rates.

If drivetrain maintenance costs for EVs are truly on par with ICE vehicles, dealers shouldn’t mind studies showing lower total cost of ownership for EV drivers. A 2017 British study (showing TOC of several vehicle types in California, Texas, and the UK) claims that, overall, maintenance costs are greater on an ICE vehicle, but those costs include oil and filter changes, coolant flushes, etc. They also take into account reduced brake wear due to regenerative braking. Newer electric vehicles seek to capitalize on this system, allowing drivers to slow — and even stop — the car by lifting off the accelerator.

That’s not good for service shop revenue, but a car’s brakes do not exist in a vacuum.

[Image: Electrify America/Plug in to the Present]

Steph Willems
Steph Willems

More by Steph Willems

Comments
Join the conversation
2 of 13 comments
  • JohnH JohnH on Nov 01, 2018

    This article needs editing. The store owned by Wes Lutz - Extreme- is located in Jackson, MICHIGAN, not MISSOURI. Thanks.

  • Beken Beken on Nov 02, 2018

    My co-worker's all electric Fiat 500E has locked him out of his car because the accessory battery died at just under 2 years, can't get winter tires for his car because the wheels are a rare bolt pattern and the tires that came with the car are an uncommon tire size. It has spent its share of time in the shop for various electrical issues. But then, that's not a "normal" electric car. It's a Fiat.

  • Ltcmgm78 Just what we need to do: add more EVs that require a charging station! We own a Volt. We charge at home. We bought the Volt off-lease. We're retired and can do all our daily errands without burning any gasoline. For us this works, but we no longer have a work commute.
  • Michael S6 Given the choice between the Hornet R/T and the Alfa, I'd pick an Uber.
  • Michael S6 Nissan seems to be doing well at the low end of the market with their small cars and cuv. Competitiveness evaporates as you move up to larger size cars and suvs.
  • Cprescott As long as they infest their products with CVT's, there is no reason to buy their products. Nissan's execution of CVT's is lackluster on a good day - not dependable and bad in experience of use. The brand has become like Mitsubishi - will sell to anyone with a pulse to get financed.
  • Lorenzo I'd like to believe, I want to believe, having had good FoMoCo vehicles - my aunt's old 1956 Fairlane, 1963 Falcon, 1968 Montego - but if Jim Farley is saying it, I can't believe it. It's been said that he goes with whatever the last person he talked to suggested. That's not the kind of guy you want running a $180 billion dollar company.
Next