Notifications & Messages

Jared Hamilton
From: Jared Hamilton
Hey - It’s time to join the thousands of other dealer professionals on DrivingSales. Create an account so you can get full access to the articles, discussions and people that are shaping the future of the automotive industry.
×
ActivEngage

ActivEngage

Exclusive Blog Posts

MDP 049 | The Darkest Timeline with 360Booth's Jay Smithweck

MDP 049 | The Darkest Timeline with 360Booth's Jay Smithweck

#TheDarkestTimeline #360Booth #Vroom #VDP #DigitalRetailer   Join David & David with Special Guest 360Booth's Jay Smithweck talking Comm…

How to Earn an A for Your BDC | KPI Cafe Season 5 Bonus 1

How to Earn an A for Your BDC | KPI Cafe Season 5 Bonus 1

In this bonus episode of the KPI Cafe, Josh Mitchell, BDC Director for Hubert Vester Auto Group, sits down with Host Dane Saville to discuss a few of the m…

Service Writer Training: People Skills Your Customers Will Love

Service Writer Training: People Skills Your Customers Will Love

Service writers do a lot of things. But, of all the things they do, the most important is managing the relationships with your customers. That’s not an e…

Master Class Homework Packet: HCM Business Plan

Master Class Homework Packet: HCM Business Plan

For those of you in a Master Class, You’ve just learned about creating a Human Capital Management business plan and how it can systematically help…

Create Change with the People-Process-Technology Framework 

Create Change with the People-Process-Technology Framework 

How many times did you come back from a 20-group or a DSES 2020, DrivingSales Executive Summit, with a great idea that can help your organization get the r…

GM's Electric Car: Stuck in Neutral?

 

General Motors can’t seem to get the Chevy Volt off of dealership lots – the American automaker has recently suspended production of its plug-in electric for five weeks while it tries to unload its excess inventory of “advanced vehicles” onto consumers. In an effort to stimulate the sales of fuel-efficient cars like the Volt, President Obama has suggested that drivers receive a $10,000 tax credit for the purchase of hybrids and electric vehicles. This proposal comes as demand steadily grows for for long-haul trucks, which account for 20% of the nation’s fuel consumption.

The vitriol and malice found in the comments section of nearly any article on the subject might lead you to believe that the elimination of oil dependence is somehow a political issue. But put aside ideology for just a second, and let’s think this through. Cutting gasoline usage means lowering petroleum demand, which means lower prices at the pump. Lower fuel costs would lead to decreased transportation and shipping expenditures, which will ultimately lower the cost of all goods that are delivered by truck, boat, or plane. As electric batteries become more efficient at affordable prices, fuel independence glimmers on the horizon – which is great news for everyone except Exxon execs and Saudi princes. So why can’t GM sell more Volts?

Part of the consumer reluctance stems from the car’s sticker price. A Chevy Volt has a base MSRP of almost $40,000 –  putting it in the same price category as a luxury-class automobile. To truly foster adoption of electric vehicles, OEMs will need to cut the price tag upfront. Some suggest that a consumer tax credit isn’t the answer. Instead of providing hybrid-electric buyers with a $10,000 credit down the road, Washington could credit GM instead, allowing the electric car to enter the market at a reduced price. After all, “$30,000” sounds a lot better than “$40,000 (with rebate),” right?

Of course, that’s assuming the price reduction will trickle down to consumers – and automaker money has proven to be notoriously sticky in the past. Ted Rubin, co-founder and President of ActivEngage, believes that any tax credits should benefit consumers directly. “A discount for the manufacturer might help create the inventory, but a discount for the consumer creates demand. Supply-side economics won’t work. You have to create the demand first.” Rubin also says that automakers already take advantage of a vast amount of government incentives – which oftendon’t translate into consumer savings.

So what lies ahead for the electric automobile? Rubin knows that OEMs already have the technology to develop purely electric vehicles – they just aren’t ready to spend the extraordinary development and production costs. Young, progressive carmakers like Fisker and Tesla Motorshave demonstrated their own battery-powered cars that can run for over 200 miles on a single charge. “If these companies can make them,” Rubin says, “so can major firms with billion-dollar budgets.”

Perhaps the only thing that will increase the electric adoption rate is time. Rising gas prices and improvements in battery technology will eventually provoke the American public into supplanting an inefficient, finite energy source with a low-cost, limitless alternative. Fuel independence is more than a divisive, political buzzword. It represents the way forward, the only logical future for automotive manufacturers and dealers. As the producer of the first purely electric car, GM has a huge advantage – if it can only shift out of neutral.

_
We need the opinions of dealers! If you have any thoughts about hybrid/electrics or how their introduction will affect your dealership, leave them in a comment at our blog!

 

Jeremy Alicandri
Stephen, I'm not sure why you are quoting a CEO of a live chat company as your industry reference? Regardless, a dealer's perspective: as much as customers love the perception of hyrbid/electric vehicles, they are reluctant to buy vehicles if they cannot realize any economic incentives. Ultimately, the automobile manufacturers must pursue innovation, and create vehicles that are pragmatic - not just "cool" to talk about.

 Unlock all of the community & features  Join Now