May 2018 The aftermarket impact of EVs: what to expect at the 2025 horizon?

In 2017, a bit more than 1 million EVs (BEVs and Plug-in Hybrids) were sold worldwide.  China accounted for more than 50% of this total.  In Europe, EV sales reached 270,000 units.  Norway is the leading market with 60.000 new EV sales which translates into a 37% share of the Norwegian new car market.  All EU5 markets are growing although the share of new EVs remain under 2%.  This growth – although limited - is still largely dependent on grants and incentives and the vast majority of European markets have national incentive packages supporting the uptake of BEVs in particular.  Broadly speaking, it is commonly accepted that, in terms of repair and maintenance costs, BEVs are more cost effective than cars with traditional internal combustion engines.  The main reasons put forward to explain the gap relate mainly to the core technology employed in BEVs engine:

• Less moving parts: 20 in a BEV engine against more than 1,000 in an ICE (Internal Combustion Engine)

• No ‘traditional’ gearbox in a BEV while this is an essential part for an ICE vehicle

• Virtually no wear and tear parts in an electric engine.  Conversely, almost all moving parts in an ICE engine are subject to wear and tear, in addition to fluids and oil.

• 90% efficiency for the BEV engine. The 10%-loss being due to the warming of the wires. Against 30% for an ICE, where the 70%-loss is due to the friction between moving parts.

However, given the low number of BEVs in operation, their impact on the current overall aftersales business is marginal.  Furthermore, despite their repair and maintenance cost effectiveness, a 2017 survey issued by the ‘Observatoire du Véhicule d’Entreprise’ (OVE) tends to prove that – for the time being in France – the TCO of BEVs is still higher than the one of an ICE for the same car category.  The main reasons quoted are a higher list price, a poorer residual value and a higher energy cost for the BEV due to the battery rental fee notably. The webinar aimed at addressing a set of questions:

• Does our TCO analysis confirm the OVE conclusions for France?  What is the situation in the other major European markets?

• If the current impact of BEVs on the overall aftersales business is marginal, is it also true at the authorised workshops of best-selling brands?

• What could be the impact of BEVs at the 2025 horizon on the overall aftermarket?

• What could be the potential impact of BEVs on a typical dealer’s aftersales business?

• And on a typical independent repairer?

• How can OEMs and dealers fight back?