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It is common knowledge that electric vehicles are increasingly popular. Nearly all car manufacturers offer at least one electric model, and there are dedicated EV brands such as Tesla, Rivian, and Lucid operating in the United States. Nonetheless, this does not mean that EVs suit everyone, and selling them is no easy task, as Rick Hendrick, the renowned NASCAR team owner and prominent car dealer, pointed out.
“The consumers will determine what gets manufactured. I have been in the automotive business for close to five decades, and you cannot coerce customers into buying something they do not desire,” Hendrick conveyed to Basem Wasef during a recent interview with Robb Report. “We were overly zealous with the EV market … I believe the EV market will eventually thrive, but we are not there yet.”
Lexus RZ. Lexus
There is certainly validity in that statement, as electric vehicles currently do not align with the lifestyles of all individuals. Most traditional automotive brands like Mercedes, Audi, and as Hendrick mentioned, even Lexus, are struggling to sell EVs at a rate comparable to their conventional vehicles.
“I have dealerships in the [Northern California] Bay Area, and when comparing the sale of a Lexus EV versus a Lexus hybrid—we have waiting lists for the hybrids and need to offer significant discounts for the EVs,” Hendrick added. “Mercedes introduced numerous [EV] models—I am a Mercedes dealer and we had a dismal year. Despite offering a $25,000 rebate in some instances with Audi and others, customers still refused to make a purchase. It is impossible to compel individuals to acquire items they do not want.”
Naturally, there is more to this narrative. Although Hendrick is a highly successful car dealer with over 100 dealerships and a workforce of 10,000, his experience in selling EVs primarily pertains to traditional or luxury manufacturers. In contrast, Tesla sells hundreds of thousands of EVs annually, Rivian has sold over 50,000 EVs, and even Ford witnessed its best year for Mustang Mach-E sales in 2023, with more than 41,000 individuals making a purchase. While these figures are not on par with the sales volume of popular internal combustion engine vehicles, they demonstrate the significant EV market demand.
Tesla Model 3 Highland. Tesla Tesla
The brands mentioned by Hendrick are not only costly, limiting their customer base, but they also do not lead in the EV market. Mercedes’ EV design aesthetic faced significant criticism, prompting the company to shift away from it shortly after its debut. Audi’s E-Tron models suffered from limited range for an extended period while being priced similarly to Tesla, if not higher. Lexus, for instance, only offers one fully electric model, the RZ, which is compact and distinctive in appearance compared to its highly popular hybrid RX models in a comparable price range.
In conclusion, Hendrick’s wealth of experience positions him to understand the challenges and trends within the industry. The rate of EV adoption in the U.S. remains relatively low, with just 8.6% of new car buyers opting for electric vehicles in 2023, according to JD Power. Consequently, selling EVs will continue to be an uphill battle for dealerships, especially in comparison to other vehicle models, for the foreseeable future. Additionally, issues such as charging infrastructure and energy expenses must be addressed as EVs gradually transition into the mainstream market.
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