Electric vehicles on the rise

In Europe, Accenture research suggests that battery electric vehicles (BEVs) will account for ~16 percent of new-car sales by 2025. By 2030, this could rise to almost 50 percent. Globally, the proportion of BEV sales is set to grow from 12 to 25 percent over the same timeframe.

This pivotal change calls on traditional automakers to rethink not only manufacturing, but also other key aspects of their business—like sales and aftersales. How should EVs best be sold in an increasingly digitalized world? And how do aftersales need to evolve to protect profitability?

To answer these key strategic questions, Accenture’s report takes lessons from two important case studies—Tesla for sales, and the Norwegian market for aftersales.

As a leading all-electric disrupter of the automotive industry, Tesla offers lessons for other automakers in making new-car sales faster, simpler, more efficient, and more effective. In particular, much can be learned from Tesla’s careful integration and orchestration of online and offline channels.

Consider that Tesla’s salespeople spend, on average, five hours less on administrative and customer-facing activities than their peers at traditional automakers. This translates to a decrease of approximately 40% in the cost per car sold. However, this efficiency does come at the cost of providing a “traditional” car-buying experience (especially in areas like test drives and vehicle handover). To respond, we recommend automakers consider the following key actions:

Norway is the undisputed leader in BEV sales. It’s therefore the ideal market to predict how growing numbers of BEVs on the roads will affect the aftersales business.

Our findings should be a wake-up call for the automotive industry. There is compelling evidence for a potentially massive 50 to 60 percent decline in aftersales profits.

The good news? Our analysis also unveils proven strategies from Norwegian dealers that can help reduce this decline to just 10 to 30 percent. These include better harnessing customer loyalty, increasing workshop efficiency and improving the pricing strategy.

Besides the increasing margin pressure in both new-car sales and aftersales and service, there is an opportunity to capture future value-pools in the industry’s rapid electrification and digitalization. While this will not, of course, happen overnight, neither will the countermeasures taken by traditional automakers and dealers. The time to act is now.