Carmakers Grapple with Including Dealerships in Selling EVs

Auto manufacturers are experimenting with various strategies to enlist dealers in their conversion to electric vehicles as they pursue the kind of profits Tesla is making on electric vehicles. Several companies, including Honda, are shifting to more automobile sales online.

The relationship between automakers and franchised dealers is supported by rules in most countries that make it hard for automakers to sell their new vehicles to customers directly without going through franchised dealers. Tesla and other recent autocar companies have found ways to avoid these restrictions and save money.

Car producers are reconsidering the sales procedures, which include selling new cars partly or entirely online. As more companies roll out electric vehicles, despite maintaining physical dealers and informative websites as well as service outlets, Tesla was one of the first vehicle companies to adopt internet sales for a sizable portion of its business.

A significant move to adopt online sales would limit dealers’ roles to only processing and repairs, and remaining vehicle delivery outlets moving forward, which will eliminate the necessity for large lots of vehicles that the dealers eventually sell to customers.

Carmakers trust that selling cars online will provide customers with a more organized and seamless buying experience. However, they also see the dealers as allies that can provide tactical advantages in matters pertaining to both sales and maintenance.

Honda Motor company has stated that it intends to transfer more of its electric vehicle sales online, which includes all of its high-end Acura models. The company is working on a plan to simplify the procedure of ordering a vehicle online, with the vehicle being picked up physically or delivered by the dealership.

General Motors Company is advising high-end dealers to invest more in electric vehicles or quit their businesses. The company has even made buyout offers to its Buick and Cadillac dealers that do not want to spend money selling electric vehicles.

Ford is one of the manufacturers facing the most resistance from dealers because it has electric vehicle certification levels that may reach a million dollars for every dealership, based on how big or small the dealership is. But this program is being challenged legally by dealers that claim the scheme is against franchise rules.

In contrast to their biggest rival General Motors, Ford is giving its dealers the option of choosing between selling electric vehicles or continuing to sell Ford’s gas-fueled vehicles. Toyota, on the other hand, does not have plans to revamp its chain of franchised dealerships as it makes investments in electric vehicles.

As the industry evolves, there is no doubt that some consensus will be reached by car manufacturers such as Mullen Automotive Inc. (NASDAQ: MULN) regarding the role that dealerships play as electrification grows to dominate the transport industry.

NOTE TO INVESTORS: The latest news and updates relating to Mullen Automotive Inc. (NASDAQ: MULN) are available in the company’s newsroom at https://ibn.fm/MULN

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