Like it or not, the government is pushing America towards electric vehicles. How will that impact local dealers, and the public?
By MARK MILLER
What kind of vehicle will you be driving in five years? Gas-powered? A hybrid? An all-electric car or truck? What will they cost? How will the most recent government plans impact local car dealers? How will this impact the average driver?
The Environmental Protection Agency’s new auto emission standards released April 11 essentially will require automobile manufacturers to decrease the number of internal combustion engine (ICE) vehicles they produce and increase the number of electrical vehicles (EV). If these proposed standards are adopted, that ratio will need to be one-third ICE and two-thirds EV by 2032. (EVs currently have about 5 percent of the market.)
What would that mean? Will it actually happen?
———
Brent Hiday was at the first national dealer meeting in eight years for Stellantis, formerly known as Chrysler, at about the same time the EPA’s announcement was made with President Biden’s full support.
“This is a Darwinian moment for dealers,” Stellantis CEO Carlos Tavares told them, “either adapt or go extinct.”
“We’ve had Darwinian moments before (in the car business),” Hiday told the News-Banner. “We will adapt.”
He had, he admitted, feared going to this convention. Rumors were flying about what would be required to remain a certified dealer. Although he was somewhat overwhelmed about what he heard, he was also encouraged. Stellantis is, by comparison with its domestic competitors, taking a more middle-of-the road approach to the future in its plans for models and required investments by its dealerships — including Hiday Chrysler-Dodge-Jeep on Bluffton’s north side — in order to meet the government’s requirements.
Greg Hiday operates Hiday Motors next door, a Chevrolet and Buick franchise. General Motors’ strategy has already required one heart-wrenching decision. But the Hiday family has a plan. “We’re committed to our customers and the community,” he said.
Just down the street a ways, Todd Reimschisel is looking back at a decision he made about eight years ago to partner with Mangold Ford in Eureka, Illinois, which changed the name of what was Reimschisel Ford, begun by his father Richard, to Family Ford of Bluffton.
“It’s really good in life walking two-by-two instead of by yourself,” he said. Ford’s strategy is for their dealers to be either ICE-certified or ICE- and EV-full sales certified. When the initial options were presented prior to the pandemic, Reimschisel opted in. But options have changed. “So we’ve been an EV dealer for several years, but not to the level that they are asking now.” Although the “final-final” decision deadlines have been in flux, the Ill. dealership will likely be an EV dealer. Via their partnership, Family Ford will not have to make that full commitment, but will still be able to offer and service EVs.
“We are going to remain a premium, top-notch, President Award service center,” Reimschisel said. “So if anyone drives one of those, even if we have not had them, we’re going to be trained, we’re going to be equipped to service them.”
For example, the new all-electric Mustangs? Reimschisel has seen one —just not in his showroom, “but we could service it,” he said. Family Ford has already made the investments necessary be a full EV service center.
“We feel like we should be able to service anything that Ford puts out.,” he added.
Service is also a key component in how the Hiday family is approaching the coming changes. Chevrolet is planning to produce both ICE and EV vehicles for most of its models. The changes will require significant investments for equipment to handle the heavier, battery-powered cars and light trucks as well as a number of charging stations for public use. Buick, however, is a different story. They have decided to become an all-EV brand by 2030. Since it takes about five years for a new car model to go from conception to market, the process is well under way.
“They announced that the investments for dealers would be at least $200,000 to $300,000 dollars,” Greg Hiday explained, “but they also made it clear they think they have too many dealers, so they offered a buy-out to every Buick dealer the United States.”
Rumor has it, he continued, that there will be just one or two Buick dealers in the greater Fort Wayne area. He was, in fact, reluctant to share the news that they have decided to drop the Buick franchise because “I have not yet communicated directly with my Buick customers,” he continued, “but I want them to know that we will still be able to service all of our Buick customers and perform Buick factory warrant service. We will still be an authorized Buick service center, we just won’t be selling brand new Buicks.”
Buick is quite a unique case in the American auto business, Brent Hiday added.
“Their largest market is China,” he said. Buick occupies a similar niche that Cadillac and Mercedes has in America. “It’s a different model than they sell here, and we understand that (model) will be brought to the U.S. but only as an EV; they will not offer a gas version.”
“What the small town Buick dealers are saying,” Greg Hiday said, “is not that they don’t want to invest the money in the EV, that’s part of what we will have to do anyway as a Chevy dealer. In my opinion, these dealers — including Hiday Motors — are saying that compared to the buyout and what we will have to deal with, we’ll take the buyout.
“But,” he immediately added, the decision was difficult for their father Larry and the entire family. “It was Larry’s original dealership. It’s been good to our family. We love Buicks.” Larry Hiday started with a Buick franchise in 1975.
While the GM and Ford approaches seem more black-and-white, Stellantis is taking what might be perceived as a “grayer” strategy. “They’re going to cover the full spectrum,” Brent Hiday said.
“For example,” he continued, “the Dodge Hornet EV is under development. We will continue to offer a gas version and a hybrid version.” The Chrysler Pacifica mini-van will be available as a hybrid or gas-powered — there is no EV Pacifica in the works. For now, at least.
Meanwhile, the new RAM REV is an EV truck and will initially have a 500-mile range, “but that’s a huge battery,” Brent Hiday adds. “Chrysler tells us that they have 26,000 engineers who say they are ‘this close’ to reducing the size and weight of the batteries by half. That would be a huge change.”
Technology a key
Technology will, all three agree, be one of the key components as to whether this will all come together under the government’s plan “that will change the way we live,” Greg Hiday said.
Tavares — Stellantis’ CEO — told his dealers that he agrees that the infrastructure for battery charging isn’t there, he agrees that the range of electric vehicles isn’t there, that the sourcing of materials and the replacement and recycling of the batteries hasn’t been figured out.
“But it will be, he told us,” Brent Hiday said.
The technology gains they’ve already seen are amazing, he continued. “And they’re obviously depending on technology advances and that technology getting cheaper for all of this to work,” Greg Hiday added.
Reimschisel however, is skeptical. “I think it’s a boat that doesn’t float,” he said. He calls it the “bellbottom effect.”
Bellbottom pants, he explained, was all the fad when he was younger. “I wore them and they dragged on the floor and it was a mess. And they were a flop. We wasted all this material and money on something we discovered we didn’t want or didn’t like. I fear that’s what we’re doing.”
“Our stance is, we’re going along although we’re not buying into the timeline,” Greg Hiday said. “But we’re taking the necessary steps to be ready, particularly on the service side. We want to be able to take care of all our customers.”
Those steps include getting what’s called a “Level-3” charging station, now on order.
Each EV is sold with a “Level-1” charger which utilizes standard 110-volt home currents. These are overnight chargers people can use at home. Level-2 chargers utilize a 220-volt connection similar to air conditioners and clothes dryers and can charge up to eight times faster than a Level-1. Level-3 requires an 480-volt connection which can be quite expensive to have installed.
“We believe we will have the first one in Wells County,” Brent Hiday said.
While the details of charging an EV for longer trips can be complicated, Greg Hiday noted that “around town and even commuting to Fort Wayne, EVs are very convenient.” But longer trips, such as to Indianapolis or to Florida, will require, at least for the time being, planning for locating charging stations and allowing for the extra time. Even the fastest charge now available, the Level-3 units, will require an hour or an hour-and-a half to be significantly charged.
“There is a lot of ‘range anxiety’ out there,” he added. “And we get that. We have the same reservations as the general pubic.”
Bluffton’s first EV
Meanwhile, not a single EV has yet to be sold by a Bluffton new car dealer.
“We haven’t had any to sell,” each one echoes.
Chevrolet has had the Chevy Bolt, but Greg Hiday has not “retailed” one although they were involved in delivering one. “There were some issues with those,” he said, “They’ve worked those bugs out and I’m jumping in with the new models.”
In fact, he has two Blazer EVs on order and expects delivery sometime this summer. But he won’t be able to sell them for 90 days. “They want us to make them available for test drives, give as many people as possible that opportunity,” Greg Hiday said.
Reimschisel has two EVs on order as well, “and they’ve been on order for months and months,” he said. They will be labeled “Ford Courtesy Transportation Vehicles,” which means he will not be able to sell them “for several months,” he explained. “They will be demos, loaners for the service department, that sort of thing. And then we’ll be able to sell them as a used vehicle.”
Meanwhile, all three have sold hybrid vehicles, “and we could sell more if we could get them,” Reimschisel said.
Greg Hiday believes that hybrids make the most sense. “The government wants zero emissions but hybrids are not zero emissions,” he said. “But logically, they make the most sense” and would relieve the “range anxiety” of the all-electric models.
What’s the future?
“We have no clue,” Greg Hiday replied with a mixture of sincerity and laughter when asked what the car business will look like in five or ten years.
All three have more questions than answers. The industry “experts” talk about how the incentives will work out and how leasing EVs will be more prevalent. Other questions center on the details of how emission mandates will be implemented and how that will impact prices and demand not of just new cars but the used car market as well. Will the environment lobby allow mining, how will sufficient minerals for the batteries be sourced, will the push for renewable energy provide enough power for more EVs?
Reimschisel specifically shared his concerns about how the average and low-income families will be able to afford a car.
“There are so many moving parts,” Reimschisel said. “I’m perplexed on how we don’t all choke on this.”
“I think the key thing here,” Greg Hiday said, “is whether the government does its part. If we as dealers get prepared and the public does their part, it’s all dependent on the government getting the infrastructure up and running — the power grid and mining the minerals and all the things that have to happen.”
miller@news-banner.com
