This article originally appeared in the Dallas Morning News.
Texas car dealers hold the keys to electric vehicle adoption in the state
By Joseph Morton
5:30 AM on Jan 1, 2024
WASHINGTON — Dallas photographer and electric vehicle enthusiast Neal Farris remembers heading to a local dealership event years ago to test drive the then-new Chevy Volt plug-in hybrid.
“You had to drive a Chevy Cruz gas car before they would let you drive the Chevy Volt,” Farris said.
As a group, they will play a critical role in consumer adoption of the new technology.
Electric vehicles are a central part of President Joe Biden’s plans to cut the country’s greenhouse gas emissions, thereby reducing air pollution and combating climate change.
The Environmental Protection Agency has proposed new emissions standards expected to pave the way for two-thirds of all new vehicle sales to be electric by 2032.
More than 4,000 dealers, including more than 300 from Texas, have signed an open letter urging Biden to back off the new regulations because consumer demand isn’t keeping up with rapidly rising supply.
Early adopters lined up last year to buy the cars and trucks as soon as they were available, but the “hope and hype” has faded and unsold inventory is surging, according to the dealers.
“They are not selling nearly as fast as they are arriving at our dealerships — even with deep price cuts, manufacturer incentives, and generous government incentives,” the dealers said in the letter.
The result has been electric vehicles piling up on dealership lots, they said.
“While the goals of the regulations are admirable, they require consumer acceptance to become a reality,” the dealers said. “With each passing day, it becomes more apparent that this attempted electric vehicle mandate is unrealistic based on current and forecasted customer demand.”
The House voted Dec. 6 on a largely party line 221-197 to block the new regulations aimed at moving the country toward electric vehicles. Reps. Vicente Gonzalez, D-McAllen, and Henry Cuellar, D-Laredo, joined all Texas Republicans in voting to block the regulations.
That measure is unlikely to advance in the Senate, where Democrats have a majority, but it’s a sign of the resistance to EVs in Congress and a preview of what’s to come if Republicans win control of the Senate and White House in 2024.
The White House says Biden’s initiatives are growing domestic EV industries, creating “good-paying union jobs,” lowering energy costs and improving air quality. It notes EV sales are still increasing and credits Biden’s initiatives to make the vehicles more affordable.
Rep. Roger Williams, R-Willow Park, owns a dealership in Weatherford and has touted his expertise on the subject. He said he didn’t sign the open letter because everyone already knows his feelings on electric vehicles.“I told the factory I don’t want them,” Williams said. “It’s a phony economy. It’s not real.”
Electric vehicles might be perfect for coastal metropolitan areas, he said, but they don’t work for those driving from Weatherford to Midland.
Car manufacturers have been pushing hard on EVs — Williams said he has a charging station at his dealership because Chrysler forced it on him.
“It should be just like any product — if the consumer wants it, demand will make it happen,” he said. “But you don’t try to create a demand when there is no demand.”
Some environmentalists advocating for electric vehicles have blamed dealers for continuing to favor gas-powered vehicles, suggesting one reason is that electric vehicles don’t require oil changes and similar maintenance. A significant percentage of dealers’ revenue comes from their service departments.
Williams acknowledged “there’s probably less that can go wrong on an EV” but said he doesn’t worry about an impact on service revenue. He noted a dealer doesn’t collect any profit until they sell a vehicle.
In addition to selling cars and trucks, he also sells many golf carts.
“A car dealer will sell anything if it makes money,” Williams said.
Making the case
The Texas Electric Transportation Resource Alliance has been working to get dealers on board.
The group credits Texas officials for backing proposals to build out the charging network and recruiting EV manufacturing to the state.
Buzz Smith, the group’s director of dealer outreach, started in the oil and gas sector but later went on to become a car salesman who moved a lot of EVs. Now he conducts Sunday video sessions to educate dealers about how to sell them.
He tells dealers to avoid focusing too much on the environmental benefits of driving an electric vehicle.
“They forget this is not a statement for most people buying a car,” Smith said. “It’s a car. They want something that has great acceleration, great handling, low maintenance, great MPG, or MPGE in the case of electric cars.”
EV proponents say they are simply better vehicles and in time this transition will look the same as the move from horse-drawn carriages to gas-powered vehicles or landlines to cell phones.
Smith acknowledged dealer worries about electric vehicles requiring less maintenance.
“That is a scary thing because it is a big portion of the income they bring in,” Smith said. “But what they’re finding is that their EV customers come back to the dealership even to buy tires. They won’t let anybody touch that car other than the dealer that sold them their car. So what they lose in volume they gain back in 100% loyalty.”
He said a primary dealer concern is the time it takes to sell an electric vehicle because new customers have so many questions about the new technology.
“We are asking commission-compensated sales people to take a big pay cut because it takes more time,” Smith said, adding that concern should ease as people become more familiar with the technology.
EV proponents are hoping for a sales surge beginning Jan. 1 thanks to a shift in the federal government incentives.
Next year, customers can take the federal EV tax credit as a discount at the point of sale, rather than having to pay upfront and claim the credit later when filing taxes.
“Texas has led the nation from oil and cattle to space exploration. Now, we’re at the forefront of renewable energy and electric vehicles,” Smith said. “We can show the way forward in this new era.”