If the car dealership and repair industry doesn’t change quickly to adapt to rising electric vehicle sales, it will die, according to one of Australia’s leading motor industry bodies.
And consumers could be caught out too as they find their ICE vehicles’ values plummet.
One of the perceived stumbling blocks to greater EV uptake in Australia lies with resistance from new car dealers who see the millions of dollars a year they pull in on servicing and spare parts evaporate as electric replaces ICE.
But according to the Motor Trades Association of Queensland – which represents retail, service and repair sectors in the state’s automotive industry – if the industry doesn’t change quickly it will die as electric vehicle sales surge.
Today’s car dealers make a lot of money out of spare parts – and electric vehicles have very few parts that will need annual replacement – and servicing, which electric cars barely need at all.
The MTA told the Senate Committee enquiry into electric vehicles sitting in Brisbane on Thursday that electric car sales will change the industry dramatically and its members – who include car dealers – need to adapt to survive what the MTA says is a coming revolution.
“Ultimately, all stakeholders need to embrace the revolution that is the transformation to electric and autonomous vehicles and comprehend how transport services will be delivered in the future,” the Motor Trades Association Queensland said in its submission to the Senate Committee.
“Business models in most cases will require profound changes to adapt to the progressive change in vehicle propulsion technology. There is likely to be extensive structural change needed within the automotive value chain that will have repercussions for the transport sector and the national economy.”
The MTA says changes will be dramatic for its members as drivers start to choose electric over ICE vehicles.
They also believe big changes will come in terms of tax as the tax take evaporates along with falling fossil fuel demand.
Here are the major impacts the new and secondhand car business can expect, according to the MTA.
- Vehicle financing will need to transition to electric vehicle assets; vehicle servicing intervals will extend; spare parts and oil sales weaken; and used cars loose value in an over supplied market.
- Service stations and repair centres will shrink as consumers switch from fuel and repairs to recharge stations and auto electrical centres.
- Independent repairers without on-line vehicle data access will find it hard to compete with large dealerships and may go out of business.
- Used car ICE vehicle dealerships are likely to disappear as consumers opt for electric vehicles.
- With the purchase of more electric vehicles as part of company and Government fleets and fleet cars being turned over on average every 3-5 years, the quantity of preowned electric vehicles is likely to increase quickly and this second market will displace used ICE vehicle sales.
- Consumers will experience loss of value on their ICE vehicles when either trading up to an electric vehicle or for private sale.
- Recyclers of ICE spare parts will have limited sales opportunities but have enormous opportunities for innovation for the recycling of some 18.8 million registered ICE vehicles.
Tony Bosworth writes for www.TheDriven.io and RenewEconomy.com.au. He has 35 years experience in journalism, and has been instrumental in launching and editing several automotive magazines including Which Car? magazine in the UK.