Keyloop CEO, Tom Kilroy participated in an expert panel for the final part of Autocar’s Power List 100 series, which Keyloop sponsored. The series highlighted the most influential people in the automotive industry. In this episode, the panel discussed the future of aftersales with a focus on electric vehicles.
Matt Prior, Editor at Autocar, hosted the webinar, and joining Tom on the panel were Lisa Brankin (Managing Director of Ford of Britain and Ireland) and Mark Busby (Director of Operations at Hendy Group).
Here are the key takeaways:
Overcoming consumer hesitancy
While early adopters were EV evangelists, the average consumer is far more hesitant about transitioning to an electric vehicle. They seek reassurance around charging, battery costs and range anxiety.
Encouraging drivers to record their journeys for a month can help alleviate their range anxiety as they often realise they drive less miles than they think and would rarely need to use public charging.
As part of the vehicle handover process, Hendy plans to take customers to public charging points during a ‘familiarisation ride’ so they can show them how easy the charging process has become.
Although they may need convincing at first, Lisa’s research reveals that over 90% of customers say they won’t go back once they’ve made the EV transition.
EVs in the used marketplace
The massive rise in EVs on the used car market spells good news for the new car market because second-hand EVs promote broader EV adoption and normalise their presence in society.
The more confidence consumers have in buying and selling used EVs, the more comfortable the market will feel about purchasing new ones. Plus, the UK is a payment-led market, so the sooner we normalise residual value and used values in the EV space, the better.
However, the used car market faces a significant challenge when it comes to determining the warranty cover for a used EV once the manufacturer’s warranty expires. Beyond the cosmetic condition of the vehicle, battery health is the defining factor in appraising an EVs value, so it’s crucial that we can accurately measure the battery life and health of out-of-warranty vehicles.
The panel agreed that a standardised measurement for battery health could make it easier for consumers to evaluate a used vehicle, and Mark mentioned that Hendy is going to publish the battery health of every used car.
What’s going on in the workshop?
Lisa discussed how EVs experience different types of wear and tear compared to combustion vehicles. In China, where EV adoption is considerably high, workshops report a higher incidence of tyre wear and bumper damage in EVs than is typical in ICE vehicles. Does this trend give the UK and Ireland a glimpse of what to expect in the future?
Mark noted that the average EV in Hendy’s workshops is just under three years old, whereas the average ICE vehicle is six years old. And, of the EVs that passed through the workshop in Q1, 71% of the average invoice was labour content, compared to 60% for ICEs. For this reason, Mark sees opportunities for dealer franchises in cosmetic repairs.
Tom explained how Keyloop’s aftersales technology helps retailers manage their workshops and deliver a seamless experience to end users. For example, bin-level data enables retailers to give customers a more accurate picture of what the service involves, agree accurate pricing in advance, and create upsell opportunities.
“We make technology to help our customers serve their customers better, keeping them loyal and happy,” Tom said. “Technology can either be helpful or infuriating. If it doesn’t work well, it’s frustrating, but if it’s done in the right way, it adds value to the experience.”
Addressing the skills shortage and the need for education
The specialised equipment and high degree of complexity that electric vehicles require have resulted in a shortage of technicians with the skills to service and repair them. This shortage must be addressed promptly so the industry can meet future demand. And, as technology evolves, the technicians will need to continuously sharpen their skills.
Ongoing education is needed at the dealership level, too. Today’s consumers are much more knowledgeable than they were two years ago, and dealerships must ensure that their salespeople remain the experts in the room. On top of that, we must keep our customers engaged in conversation so that we can educate the market as the EV adoption changes and technology advances.
Reducing write-offs
Due to their high battery and expensive repair costs, EVs will likely be written off after a collision. However, efforts are being made to reduce the write-off rate. Lisa mentioned that Ford is upskilling its technicians so that they can repair batteries rather than replace them, which would dramatically reduce costs.
Tom pointed out that many of the first EVs were initially conceived as combustion vehicles and adapted to be electric. But now that we’re building them from scratch, we can reimagine the design and factor in repair every step of the way.
The Road to 2035
Automotive manufacturers have been set annual targets for EV adoption on the road to 2035, when new petrol and diesel vehicle sales will be banned. However, it’s unlikely that market demand will follow the neat pathway laid out by the UK government. This could leave the industry with no choice but to sell customers vehicles they don’t want – either by reducing costs or controlling supply. An equivalent target for charging infrastructure is noticeably absent.
Has politics got in the way of the natural trajectory that EVs were on? Mark thinks so. “They took away direct incentives for consumers, creating chaos in the marketplace,” he said. “The trouble is that complexity at the manufacturing level travels down to the retailer and end user, preventing widespread EV adoption.”
Can EVs become more profitable than ICEs?
It’s too early to tell, but the panel believes EVs could be more profitable than combustion vehicles one day. Increasing retention will be key to improving profitability. Traditionally, owners of ICE vehicles stay with the retailer for as long as they’re in warranty with the OEM, and then they go elsewhere. However, the complexity of electric vehicles could change this behaviour – time will tell.…
While new revenue opportunities may emerge in the future, everyone agreed that the right now the objective should be to make EV adoption as easy as possible for consumers. “Our focus is on removing complexity and bringing simplicity for retailers and end users,” Tom commented. “Owning a car and being free are important parts of daily life. We want to make that joyful for people so they can enjoy the experience without worrying about the complexity of it all.”
