22 May 2019

Widespread adoption of electric vehicles in the UK could see retailers’ aftersales profits drop 40% on servicing and 20% on parts.

The figures are a warning from Norway where full EVs already account for 50% of the new car market.

The message to UK retailers came from Petter Nordesjo, former managing director at BMW Sweden, talking of his experience of EV take-up across the whole of Scandinavia.

Mr Nordesjo has seen retailers take a big hit on aftersales profits, with fewer moving parts on vehicles meaning less mechanical wear and reduced servicing requirements.

He argues that this is something UK retailers need to begin planning for, with electrification potentially at a tipping point. While traditional petrol and diesel technology might continue improving to around 2020, Mr Nordesjo believes regulation will drive market change from 2021, and sales of electric vehicles will accelerate from 2025.

“This will come much faster than you think,” he said. “You need to be ready: embrace technology for efficiency to increase sales and reduce expenses, and use economies of scale to reduce operating expenses.”

Tags: aftersales, Electric Vehicles, EV, Norway, profits