CNN warned readers last week The car shortage we know here in America shouldn’t be expected to disappear anytime soon, due to global semiconductor shortages and supply chain disruptions.
This follows a cascade of announcements from automakers who their production lines stall, who continued throughout the summer months. These shortages only fueled the fire in automobile demand: The New York Times reported last month that even used car prices increased by about 45% compared to last year.
Where is all this demand for cars coming from? A number of economic factors are certainly at play, but changing demographics and buyer preferences can be a big part of it. The New York Times also recently reported that Millennials are overtaking the baby boomer generation. for the first time in the purchase of new cars, accounting for about 32 percent of total new car sales.
These buyers, according to the article, largely prefer to ignore car dealerships and buy directly online. The article goes on to quote that “Millennials were almost twice as likely as Baby Boomers to shop for and purchase a vehicle – new or used – entirely online, according to Cars.com.” Taking note of this trend, even OEMs, including Ford finally seem to be moving away from the concession model with his turn to F-150 on ordersand pre-orders for lighting.
Could this year be the year we finally see momentum to abandon the dealership?
Beyond the tendency of consumers to prefer online sales to the old spectacle of the dog and the pony in car parks, it suffices to imagine the positive environmental impacts of reclaiming the land they currently occupy (bye- bye, leaking underground oil storage tanks). As I envision and some pontificate about the demise of dealerships, automakers are given the luxury of being able to slowly rotate their model. Meanwhile, the weight of the burden of being one of the first to adopt an innovative new model has fallen on the shoulders of automakers of exclusively electric vehicles. A model which, of course, was developed by a certain manufacturer of electric vehicles.
It’s no secret that the dealers themselves are geared towards selling vehicles with internal combustion engines (ICEs).
As ACTNews mentioned in its article “The direct sale to consumers of electric vehicles is obvious” Dealer employees are severely under-equipped with knowledge about the current financial incentives available, charging infrastructure, and other information specific to EV ownership. Perhaps the biggest obstacle to the spread of direct sales of electric vehicles to consumers, however, is state laws such as those of Kansas, which not only ban these transactions outright, but in fact make it more expensive to register an electric vehicle than an ICE vehicle (see the full list of offenders here).
Tesla has so many disputes with dealers that there is actually a Wikipedia page dedicated only to their documentation. Encouragingly, over the past year, Rivian, Lucid and Lordstown united to Tesla in order to take bans such as those in these states, in an effort to finally make the purchase of electric vehicles more accessible to more Americans.