Car dealers find growing interest in electric vehicles as automakers prepare to pivot
Consumer interest in electric vehicles (EVs) is growing in the region as the auto industry nationally makes a giant pivot from producing internal combustion engines to EVs.
Some area new-car dealerships are plugging into the new technology by getting their employees certified to sell and service EVs, and collaborating with the state of Minnesota and Minnesota Power to educate customers about EVs and the accompanying electric-power infrastructure that will be needed.
“The market is preparing for a big pivot in 2025 when carmakers will offer full lineups of EV models,” said Yusef Orest, electric vehicles programs and services representative for Minnesota Power. “And then the next large pivot is the (total) departure from gasoline engines,” which many industry observers expect to happen by 2035. General Motors has said it hopes to be selling only electric passenger vehicles by that year.
The big pivot hasn’t happened yet, of course. EVs make up less than one-half of 1% of cars and trucks on the road in Minnesota, according to state of Minnesota statistics. Nationally, EV sales accounted for less than 2% of sales in 2020.
But these numbers will change significantly – and soon – thanks to pushes by government and accelerated investments in EV technology by automakers.
As Minnesota Public Radio (MPR) and others have reported, Gov. Tim Walz signed new Minnesota rules that will force manufacturers to increase the number of electric cars for sale in the state by 2024. In addition, President Joe Biden has signed an executive order that calls for half of all passenger vehicles sold in 2030 to have zero emissions.
Meanwhile, the auto industry is rapidly charging toward an EV future with investments in EV technology that will total $330 billion between 2021 and 2025, according to an estimate by Alix Partners Consulting. Further, GM and Volkswagen will spend $35 billion and $42 billion respectively on electric and autonomous vehicles from 2020 to 2025.
Dealerships see interest
Several area new-car dealerships report a growing interest from customers in EVs.
At VW of Duluth, prospective buyers are especially interested in the ID.4 crossover SUV model, said Serina Sprecco, a sales consultant. She said the dealer has sold about 10 in person and another 15 to 20 are on order, all for the 2022 model. Those sold at the dealer were rear-wheel drive models, and the ones on order are for all-wheel drive, Sprecco said. “We’ll start seeing them fly off the lot once we have our fleet of all-wheel drive models.”
Sprecco is impressed with the amount of research customers have done ahead of time on EVs before visiting the dealer. “There is a fair amount of interest” in EVs in the Duluth area, she said, because, “It’s a granola city …it’s a green focused, eco-friendly city.”
NorthStar Ford in Duluth has gotten “quite a few reservations and orders for EVs and hybrids, mostly for the Ford Lightning,” said Joe Seppala, sales manager. He didn’t specify an actual number of reservations. The Lightning is an all-electric version of Ford’s F-150 truck and is expected to hit showroom floors in early 2022.
The all-electric Ford Mustang Mach-E SUV has also been popular, Seppala said, but because of supply chain issues, the dealership hasn’t been able to keep any models in stock.
Ford EVs are popular on the Iron Range. “We’ve actually been quite surprised with the interest level in the Mach-E and the Lightning,” said Laura Hughes, general manager, Lundgren Ford Lincoln in Eveleth. So far, the dealer has 10 orders for the Lightning. They’ve also sold two Mach-Es and have more on the way – again, supply issues notwithstanding.
EV interest hasn’t been as high at nearby Iron Trail Motors in Virginia, said Amanda O’Brien, general sales manager. She said they company does sell “a lot of the Toyota hybrid models, from the Corolla up to the Highlander” quite consistently. The dealer is anticipating interest in the all-electric Chevrolet Silverado, which is set to debut in early 2022.
Concerns: Cost, infrastructure, ‘range anxiety’
Potential EV buyers have expressed concerns about the overall cost of EVs. In some cases, though the sales or sticker price can be comparable to gasoline-powered cars, depending on models, the overall cost of ownership can be higher, when looking at service (repair) and maintenance (wear and tear, fluid replacements) costs. However, several sources pointed out that there are federal tax incentives that can make EVs less expensive.
Beyond the cost issue, though, customers are more worried about the lack of charging stations and so-called “range anxiety” – how far one’s car will go on a charge, according to Jukka Kukkonen, a St. Paul-based EV consultant who has worked with the state of Minnesota and Minnesota Power to provide EV education to consumers and car dealers.
“That skepticism comes from something new that they haven’t experienced yet,” Kukkonen recently told MPR.
To make widespread adoption of EVs a reality, a new electric-power infrastructure is needed. Residential vehicle chargers are needed. A vast network of public, commercial, fast-charging stations throughout the country are needed, not unlike the existing network of gas stations.
So, what about that charging station question? As Kukkonen recently told Business North, “Over 85% of charging happens in your home garage. That’s the most affordable and convenient way for people to power their drive,” thus making access to public charging stations less of an issue.
Along those lines, some dealers have been talking to local contractors and electricians about installing the infrastructure to fast-charge these vehicles in new home and garage construction.
In addition, more public, fast-charging stations are being added all of the time, said Minnesota Power’s Orest, who, along with Kukkonen, met in early October with auto dealers in Northern Minnesota. The utility also hosted an all-electric car show in Duluth in October that was geared to members of the public who wanted to learn more about EVs. The event was part of Minnesota Power’s mission of supporting the growth of EVs, Orest said.
Currently, in Minnesota, there are about 71 fast chargers across the state. Additionally, Minnesota Power will be installing and operating 16 fast-charging stations in its coverage area. Construction of these chargers will be complete by 2023.
Orest said the stations will be located in several different regions to make sure “EV charging is accessible to everyone.” Locations were selected based on a lack of existing chargers, population density, travel corridors and areas of environmental justice concerns based on the Minnesota Pollution Control Agency’s criteria.
These added chargers, Orest said, “Will help reduce charging and range anxiety for EV drivers.”
What about that range anxiety?
Range numbers have changed and improved substantially in the last 10 years, Kukkonen said. Early EVs used to have ranges of about 100 miles. These days, cars sold in the United States have average ranges of 250 miles. For example, the EPA estimated average range for VW’s ID.4 is 260 miles. And, despite batteries losing some power in cold weather, newer lithium battery technology can handle colder temperatures better than earlier EVs, according to Kukkonen.
Infrastructure and battery range have been “big drawbacks” to driving EVs, said John Toman, who does sales and leasing for Benna Ford in Superior. But he said these issues are getting resolved. “Batteries are getting stronger and stronger, infrastructure is getting solved with power companies helping out. Even in remote areas like Gary New Duluth, there’s a car wash there that has a charging station.”
Ultimately, when it comes to EVs, “I’m bullish,” said Paul Blomquist, who has run car dealerships for 30-plus years in Northwest Minnesota. He owns C&M Ford and C&M Chrysler Dodge Jeep Ram in Hallock and Roseau County Ford in Roseau. Prospective EV buyers “are evolving … There’s a lot of curiosity, an evolution of mindset. And that curiosity is leading to interest and people wanting to buy. That wasn’t there a year ago.”
Blomquist has been an EV ambassador of sorts, working as a part of the EV education road show in October with Kukkonen and others.
He said he has orders for 59 Ford Lightnings, the all-electric truck. “And we are truck country up here, so that excites me.”