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More than 600 Volkswagen dealers nationwide have become electric vehicle hubs, the result of a $20 million investment by Volkswagen of America. The results were announced Thursday as part of the automaker’s “Network Readiness Co-Op Program.”<\/p>\n\n\n\n
At its core, the program is meant to establish a 50-state dealership network EV infrastructure, by taking advantage of one that\u2019s already up and running. Volkswagen dealers have added 23,490 kWh of charging capacity, the company said in a statement.<\/p>\n\n\n\n
Beyond that, more than 1,260 EV service technicians have been trained, as have dedicated EV specialists, in an effort to enhance the sales experience nationwide.<\/p>\n\n\n\n
“It\u2019s our dealership partners who bring their communities into electric vehicles,” said Scott Keogh, president and CEO of Volkswagen Group of America, in a statement. \u201cWe\u2019re dedicated to fully support them.\u201d<\/p>\n\n\n\n
Part of Volkswagen\u2019s EV sales effort<\/h2>\n\n\n\n
The program is essential in supporting Volkswagen sales as the industry converts to electric propulsion. Demand for Volkswagen\u2019s first product in their new EV line-up, the ID.4, rose 4.8% to 6,049 units in the third quarter of 2021, up from 5,756 units in the second quarter. <\/p>\n\n\n\n
![\"\"](\"https:\/\/www.thedetroitbureau.com\/wp-content\/uploads\/2021\/12\/VW-EV-hub-4-1024x683.jpg\")
Not surprisingly, Keogh said that nine out of 10 Volkswagen ID.4 customers are first-time EV buyers, so their experience at VW showrooms is crucial to the brand\u2019s long-term success. To ensure their ongoing experience is positive, Volkswagen launched the EV Technician Retention Program, which aims to increase training, retain its skilled technicians, and help recruit new techs adept at handling EVs.\u00a0<\/p>\n\n\n\n
A growing part of VW\u2019s sales<\/h2>\n\n\n\n
Still, EVs are still a small part of the picture, with the ID.4 accounting for 2.4% of Volkswagen\u2019s 509,863 U.S. sales through the third quarter of this year. That\u2019s somewhat less than total U.S. EV sales, which accounted for 3.6% of vehicle sales in the second quarter of this year up from 1.8% in Q2 2020. But the buyers who have opted for the ID.4 are in it for the long haul. Volkswagen says that more than 85% have enrolled for 3 years of unlimited charging at Electrify America DC Fast Chargers.<\/p>\n\n\n\n
Needless to say, dealers are encouraged.<\/p>\n\n\n\n
![\"\"](\"https:\/\/www.thedetroitbureau.com\/wp-content\/uploads\/2021\/12\/VW-EV-hub-2-1024x768.jpg\")
\u201cI believe with the commitment Volkswagen has put forth to electrification along with the service and support the dealer body will offer, Volkswagen will be the top choice on consumers\u2019 shopping list,\u201d said Tom McMenamin, Volkswagen National Dealer Chairman and Dealer Principal of Toms River Volkswagen in Toms River N.J. \u201cI am very excited for the electric future with Volkswagen.\u201d<\/p>\n\n\n\n
A turning point for auto dealers<\/h2>\n\n\n\n
The oncoming tide of EVs is affecting every part of a car dealer\u2019s business, necessitating investment, training, and reordering of profits according to a report by McKinsey. <\/p>\n\n\n\n
Sales people need to be able to answer consumer\u2019s questions about EVs. The service department needs specialized tools and equipment, and technicians will need to know how to safely service high-voltage powertrains.\u00a0<\/p>\n\n\n\n
The effect on dealership sales model<\/h2>\n\n\n\n
And with Tesla\u2019s direct sales model providing the template for new EV startups, dealers have far less pricing flexibility. Tesla\u2019s online sales model has trained consumers to expect price transparency. With more EVs coming from traditional OEMs, the pressure to improve online sales experience, or possibly even sell online, will only increase. <\/p>\n\n\n\n
![\"\"](\"https:\/\/www.thedetroitbureau.com\/wp-content\/uploads\/2021\/12\/VW-EV-hub-1-1024x768.jpg\")
According to McKinsey\u2019s report, 16 states prohibit direct sales of automobiles, while another 12 states have made an exception for Tesla. And the picture isn\u2019t clear on how profitable used EVs will be. Currently, they depreciate heavily due to consumer concerns about long-term battery durability. Longer term, that could change, but the timeline is uncertain.<\/p>\n\n\n\n
A key changing service picture <\/h2>\n\n\n\n
Currently, service work such as brake service, tire rotation, and suspension repair, require going to a dealer. But over-the-air updates do not. EVs also have fewer parts, which will likely impact after-sales service, a key profit center. But it\u2019s not all bad. While EVs may require fewer trips to the dealer, when they do need service, the jobs are more complex. <\/p>\n\n\n\n
Consider advanced driver-assistance systems, which are becoming more intertwined with the driveline than ever before. The same is true of infotainment systems. The increased time required to repair these items will increase revenue per visit, even there are fewer visits. That said, when it comes to buying accessories, EV buyers spend 40% less on aftermarket parts when compared to ICE buyers. The picture looks better for the dealer\u2019s finance office. EVs are more expensive to buy, and uncertainty over their performance could lead first-time buyers to buy additional F&I products, increasing dealer revenue.<\/p>\n\n\n\n
Given that EVs are changing dealer profitability, and necessitating huge investments in equipment and personnel, Volkswagen\u2019s investment in its dealer body is no doubt a welcome relief to dealers battered after 18 months of Pandemic-infused uncertainty.<\/p>\n","protected":false},"excerpt":{"rendered":"
TheDetroitBureau.com has the details on how Volkswagen is transforming its dealer network. Plug into our story and find out how.<\/p>\n","protected":false},"author":13752,"featured_media":215126,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,8,5,1908,10,3332,9],"tags":[4040,4036,4039,4035,745,4037],"make":[113],"post-state":[],"category_old":[],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/215119"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/13752"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=215119"}],"version-history":[{"count":20,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/215119\/revisions"}],"predecessor-version":[{"id":215172,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/215119\/revisions\/215172"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/215126"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=215119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=215119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=215119"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=215119"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=215119"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=215119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}