Perhaps you’re thinking about expanding your shop’s offerings to include electric vehicles. From a business perspective you might be asking whether such a significant investment will generate an adequate return.
The investment is significant. After all, you’ll most likely need to reorganize your facility and possibly even add on to accommodate incoming EVs while still providing quality service to customers with internal combustion engine-powered vehicles. Additionally, other upfront and ongoing costs to consider might include the need for new diagnostic equipment and service tools, an expanded parts inventory and training for technicians.
To start answering the ROI question, look no further than the projected growth of electric vehicles. According to Mordor Intelligence, a producer of market data and insight reports, the electric vehicle repair service market is expected to grow at more than 9% annually over the next five years. Furthermore, what was an $18 billion market in 2018 is anticipated to be valued at $31 billion in 2028.
A Good Time to Get Ahead
In July of 2022, IMR Automotive Market Research interviewed 5,000 independent automotive repair shops across the U.S. to get insight into their exposure to electric vehicles, the shops’ investment in tools, equipment and training, and their view of when they believe EVs will impact their business.
The conclusions in their report on the Impact of Battery Electric Vehicle and Hybrid Electric Vehicle Repair and Service At Independent Repair Shops include:
- Of the independent repair shops that service EVs, over the past two years 95.6% have seen an increase in the number of those vehicles coming to their shop for service.
- Forty-seven percent of shops believe the increasing number of EVs on the road will impact their business over the next two years.
- Among all independent repair shops, 42.4% have invested in tools and equipment to service EVs and 41.2% have invested in training for their technicians.
When and How Fast to Make the Shift
Acuity Insurance suggests seeing whether there are more EVs on the road or EV charging stations in your area. Another sign is whether any larger businesses have announced they will be changing their delivery fleets to EVs.
“The shift to EVs is not a matter of if, it’s a matter of when,” they wrote. “These are all indicators that it might be time to capture the market before your competition and set your shop up for repeat business and loyal customers.”
There is no doubt that the increasing demand for electric vehicles opens up new business opportunities for automotive service providers. As EVs become more widely available, correctly reading the signs will lead to a successful expansion into EV service.