Currently reading: Industry insight: The future of aftersales in the electric era

Electrification poses both challenges and opportunities for the world of aftersales, as we discovered in a recent webinar with Ford, Hendy and Keyloop

From servicing and repairs to customer care and warranty work, aftersales is the margin-rich lifeblood for dealerships and their in-house service teams. But, as electric vehicles (EVs) continue to fly off forecourts, dealer groups and OEMs are facing new and unique challenges when it comes to the maintenance of these new models.

Unlike the relatively extensive aftercare required for the upkeep of traditional internal combustion engine (ICE) models, EVs generally need less looking after. They have fewer moving parts, longer service intervals and near-impeccable reliability records. But they also present new challenges around training, safety, infrastructure and supply chains.

So, the question is: what exactly does the future of aftersales look like in the electric era, and can it remain a profitable enterprise?

To answer those questions (and more), we partnered with Keyloop – the global technology provider of automotive retail software who helps dealerships and OEMs deliver better, stronger and more connected experiences – to invite a select group of industry leaders to an hour-long summit to discuss the biggest challenges facing the world of aftersales, now and in the coming years.

Host Matt Prior, Autocar’s editor-at-large, was joined by Lisa Brankin, Managing Director of Ford of Britain and Ireland, Mark Busby, Director of Commercial Operations at dealer group Hendy, and Tom Kilroy, CEO of Keyloop. Follow the link below to watch the on-demand webinar.

Watch on-demand the Autocar Business Live webinar 'Leaders' summit: future of aftersales'

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A tricky transitional period

As anyone working in automotive will know, the transition from petrol and diesel to electric is arguably the biggest transformation in the industry’s 100-year-plus history.

The fast-accelerating move to hybrid and electric models has changed much about what drivers know and expect from car ownership – from refuelling and connected technology to costs. But it has also introduced plenty of changes for the industry in terms of aftersales and maintenance.

As Lisa Brankin, Managing Director of Ford of Britain and Ireland, explains, this shift in the landscape has sparked a complex juggling act for dealer groups and manufacturers alike. “One of the biggest challenges our dealer network is facing is having to manage electrified vehicles alongside ICE models and all of our other products,” she explained on our exclusive Autocar Business webinar.

“For starters, there are different safety requirements when working with electric vehicles, and that requires upskilling our technicians and updating our facilities – two things we’ve been working very hard to do. Then there’s managing new supply chains for electric-specific parts – like batteries and motors – alongside the supply chains we already have in place.”

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Mark Busby, Director of Commercial Operations at Hendy, agreed that the switch to electric poses challenges for dealer workshops. “The degree of complexity that we're going through right now is challenging,” he said.

“We've got plenty of technicians in workshops that have all learned and developed their skills working with ICE vehicles. Now, because of electric cars, they’re having to go through a sort of ‘unlearn and relearn’ process, and that obviously presents some challenges. Another factor is the level of investment required, both in terms of the development of our people and tooling and facilitates needed to work on electric vehicles.”

Mark went on to explain that another challenge comes in the form of customer education around the maintenance of EVs. “The two most common questions that we get asked are about range anxiety and, oddly, how much a new battery costs. That’s quite a strange question when you consider that the battery generally has a longer warranty than the vehicle – eight years minimum for most manufacturers. 

“If I think back to my days in a showroom and selling vehicles, no one ever asked me how much a replacement engine was. This is the sort of nervousness that's been put into people's minds when it comes to electric cars and their upkeep.”

However, it’s not all bad news. As Keyloop’s Tom Kilroy explained, state-of-the-art software can help dealerships better manage the pressures of working with electric vehicles, while also providing an enhanced customer experience. “We’ve recently demonstrated some of our new aftersales software to Ford UK and how it can help customers effortlessly manage their online service bookings and on-the-day check-ins,” he said.

“We also make technology that helps our customers serve their customers better and keep them loyal and happy. I'm conscious that technology can at times be infuriating, but when done well it’s definitely an additive to the entire aftersales experience.”

With technology comes opportunity

Despite the challenges in staffing, infrastructure and customer education, the advanced in-car technology that comes with the latest electric and hybrid models does offer significant opportunities to the aftersales market – especially when it comes to customer service and diagnostics.

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“One really exciting thing is the connectivity that comes with electrification,” said Ford UK’s Lisa Brankin. “It brings a new degree of prognostics, and this means that when vehicles come into workshops our technicians are able to see fault codes ahead of time so they can better prepare for what comes through the door, and that ultimately allows us to offer better levels of customer service. It also lets us equip our customers with better live information about what's happening with their vehicles, while giving them the knowledge on how to look after them in a more proactive way.”

Keyloop boss Tom Kilroy agreed. “When it comes to electric cars, over-the-air telematics updates and diagnostics are a critical part of keeping a vehicle healthy and ensuring that customers are looked after properly.”

However, this newfound connectivity might prove to be a double-edged sword. Many new electric and hybrid vehicles offer over-the-air updates, so software like navigation and AI integration can remain as relevant and usable as possible without the need for a car to come into a service centre. On the other hand, this also closes off potential engagement and revenue opportunities for dealerships. And that brings us neatly onto profitability.

Aftersales will remain profitable in the electric era

As we’ve already mentioned, the improved reliability of electric models over internal combustion engine cars – allied to longer service intervals, fewer moving parts and over-the-air updates – may all result in cheaper running costs and better service for customers, but can aftersales remain profitable for dealerships? Mark Busby from Hendy seemed to think so.

“I do believe that EVs present the franchised dealer network with many opportunities,” Mark said. “I think it's going to be more difficult for customers to find independents that can work on multiple electric vehicles brands, and that in itself is good news for dealers. Another key statistic I saw recently was about labour. In Q1 of 2024, 71% of the invoiced work done to electric cars in our workshops was labour, whereas that figure was about 60% on an average ICE vehicle. That’s a very interesting dynamic in terms of cost and profitability.

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“We also think that cosmetic repairs is an area that franchised dealers should be exploring more. And tyres. Tyres are critical. We’ve always had an expression in our business: ‘If we lose the tyre, we lose the business’. What I mean by that is if we identify that a tyre needs replacing during a visual health check, and we don't convert that to a sale, the customer is likely to go to an independent garage where they will be offering services that go far beyond tyres.”

Ford UK’s Lisa Brankin agreed there’s still money to be made in aftersales. But, for larger OEMs like Ford, that’s not at the top of their priority list at the moment. “I think there are definitely going to be revenue opportunities over the lifetime of an electric vehicle,” Lisa said. “That could come in the form of charging or connected services. But, at the moment, we’re very much focused on making the entry into EVs as easy as possible for customers; it's not about looking at every revenue opportunity right now.

“As we go forward, I’m sure those opportunities will arise – and one of the things we’re trying to ensure as a manufacturer and as a dealer network is that we can keep our customers with us for longer. So, in the UK, we tend to keep our aftersales customers for the first three years before they move into the non-franchised dealer network. To keep them in-house, we’ll need to learn and evolve as a business.”

So, there you have it. While electric vehicles do pose fresh challenges to the aftersales market, it’s clear that they also offer fresh opportunities for even better customer interaction and profitability. It’s just making sure you’re ahead of the curve.

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