Tomorrow' s car dealership might look more like the Apple Store

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Tomorrow' s car dealership might look more like the Apple Store

, author of Illustration: Maura Losch/Axios Gasoline-powered cars could soon start to disappear, but car dealers aren't going anywhere, in part because they're protected by . Their business is changing fast, however, as and electric vehicles get more popular. Why it matters: Consumers have plenty of gripes about the car-buying process. But they still want to visit with knowledgeable specialists to learn about advanced technology and troubleshoot problems.First-time EV buyers have lots of questions about charging and more. Down the road, pre-owned EV buyers will need more hand-holding, too. Dealerships that adapt best will look something like the automotive version of Apple's Genius Bar, experts say. Driving the news: Carmakers are delivering an ultimatum of sorts to their franchised dealers: Evolve and invest for the EV era, or say goodbye. Ford dealers, for example, have until the end of October to decide whether to invest up to $1.2 million on chargers and other EV-related services. (The automaker wants its dealer network to serve double duty as a public charging network.)Those who refuse won't be allowed to sell future Ford EVs, although they'll have a second chance to get on board in 2027.Other brands, including GM and Hyundai, are demanding similar changes.They all want to compete with disruptive EV makers like Tesla, which sells directly to consumers and handles maintenance through a network of mobile technicians and service centers. The intrigue: Some experts say automakers are using the shift to EVs as a way to thin their dealer ranks.When General Motors presented a similar choice to its 900 Cadillac dealers in 2020, more than a third instead. The rest are all-in on EVs. The big picture: Car dealers are right now because pandemic-related supply chain disruptions mean they have fewer cars to sell and can charge higher prices. Meanwhile, EVs are becoming more popular. They currently account for about 5% of new car sales, but that share is expected to grow significantly over the next decade.On Thursday, New York Gov. Kathy Hochul said the state will follow California in mandating 100% zero-emissions for new vehicles by 2035. All of this adds up to momentous changes for car dealers and their customers. Yet car shoppers overwhelmingly prefer the dealer experience to online shopping, according to a new , a human behavior and analytics firm. 57% prefer the traditional approach, while just 20% favor Tesla's direct retail model.When it comes to EVs, 74% said they would prefer to buy one at a dealership, rather than from an auto manufacturer or third party.Nearly one-third of shoppers expect car dealers to be a primary source of EV information. The surprising results contradict popular opinion that consumers want to buy cars the way they do shoes or groceries.What they want, it turns out, is more education and less hard sell, Escalent vice president K.C. Boyce tells Axios."When EVs go mainstream, you can't underestimate the amount of hand-holding that will be needed." Yes, but: find that dealers aren't well-prepared to sell EVs.They don't know enough about charging, for example, and don't always inform customers about warranties, rebates and . The other side: Many automakers weren't yet selling EVs when these surveys were conducted several years ago. The bottom line: Carmakers insist their dealer networks can be an asset in the EV era because of their physical locations and their existing customer relationships. But those dealers have a lot of work to do before they're EV experts. Editor’s note: This story has been updated to clarify that some car dealers weren’t selling EVs when the secret shopper studies were done several years ago.

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