How Will Electrification Affect the Automotive Industry?

As demands for improved fuel economy and the desire to become less dependent on foreign oil, the mandate for the auto manufactures is to produce more electrified vehicles. Electrified vehicles include the obvious battery powered electric vehicles but it also includes plug in hybrids and fuel cell vehicles. Tesla is the brand many of us think of when it comes to battery powered vehicles but many other manufactures are creating full battery powered vehicles and there are many more to come. Electric vehicles are becoming more viable as a result of battery technology improving and the number of miles on a charge increases. The new Tesla Model S Plaid has a potential range of 500 miles which is a tremendous improvement over the 300 mile range of the previous models. Tesla remains at the top of electric vehicles sold in the United States and in 2020 they sold just under 300,000 new vehicles. Many of those being the Model 3 because of their lower retail prices and their extended range.  Recently GM announced they had developed a new Ultium battery that has extended ranges and also allows for the battery to be in configured in a variety of different positions allowing it to adapt to many different model platforms. GM also recently announced their goal to produce only electric vehicles by 2035. If you are a bit of a technologist, these are exciting times, however electric vehicles will remain a small percentage of vehicles sold over the next 5 years and will currently remain a small percentage of vehicles in operations.

Hybrids will also continue to bridge the gap to an all-electric fleet and is predicted to grow nearly 10% each year from 2021 to 2026 within the United States. Plug In Hybrids are gaining popularity as well. A plug in hybrid is similar to a traditional hybrid with a battery and an internal combustion engine (ICE) but they also have a charging port to recharge the battery. They can drive extended periods on the battery but can also drive on the ICE. Hybrids maximize the fuel efficiency of the gas powered engine.

So what does this mean for the service industry? Based on the prior two paragraphs you might be extremely excited about the future or you might be ready to sell your tools and find another career. Well before you do that, take a deep breath because this is an evolution that will take some time to really affect the aftermarket industry. However, it is important to plan for the future now. We will all need more training on these advance systems and will require some investment in specialty tools. This is not the first time we have been faced with technology challenges. In fact, the one consistency to our industry has been change. Whether it was the change from points to electronic ignition or from carburetors to fuel injection, our industry has been faced with change and we have always thrived. But it does take effort, it will require training, access to vehicle information and the proper tools to service these vehicles.

Furthermore, electric vehicles and Hybrid vehicles will still require regular maintenance and service just like any gasoline or diesel powered vehicles. Whether it’s tires, brakes, cabin air filters, steering or suspension work. Those services remain a large part of the service dollars for a shop. The lack of oil changes does create a headwind for the aftermarket. Today, oil changes are a great traffic driver and allow you to perform an inspection and even build a relationship with your customers due to the higher frequency of the service. As an industry we have to rely on other services to be the traffic drivers.

Training is obviously going to play a significant role and will need to be adjusted to service modern vehicles. This goes beyond just electric vehicles and Hybrid vehicles and it will be important for shop owners to have an appetite for training and to provide and allow their staff to be trained.

Our industry has been faced with challenges throughout its history and we have continued to push the boundary of what the aftermarket can do. Consumers have made it clear that they want choices when it comes to vehicle service and I am confident that we remain a viable solution for them.