The Impact of Extended Coverage in the Growing EV Market

Did you know that more than 10 million electric vehicles are on the road worldwide today? To put this into perspective, that figure was only 53,000 in 2012, representing a massive 18,000% growth in the EV market. As the EV market continues to thrive, exploring the benefits of vehicle service contract coverage, the costs associated with electric vehicle repairs, and the unique technical requirements of these environmentally friendly vehicles is essential.

Dealer can arm themselves with information about how vehicle service contracts cover electric vehicles, which will help customers have a smoother ownership experience while reducing unforeseen costs.

How to Keep Electric Vehicles Running Smoothly While Avoiding Costly Repairs

Electric vehicles have gained immense popularity among consumers due to their eco-friendliness, energy efficiency, and long-term cost savings. Modern EVs can cover over 400 miles on a single charge, which has significantly reduced the “range anxiety” associated with all-electric vehicles.

However, it is essential to acknowledge that, like their internal combustion engine (ICE) counterparts, EVs will also require mechanical repairs over time due to general use and breakdown of associated parts. While they demand less maintenance overall, EV repairs are often be more complex and expensive than those of traditional combustion engine cars.

The first thing drivers must do as part of owning an electric vehicle is to keep the battery maintained. Ensuring the upkeep and optimal condition of an electric vehicle’s lithium-ion battery is done by diligently following the guidelines provided by the manufacturer. This entails consistently maintaining the battery’s charge level within the recommended range and safeguarding it from extreme temperature variations (below 20 F or above 95 F) that may potentially affect its efficiency and lifespan.

Just like traditional combustion engine cars, the other components of EVs require routine maintenance. Reminding customers to follow the recommended service intervals for tire rotations, brake inspections, and fluid checks will ensure optimal performance and help to identify potential issues before they escalate. Mechanical issues that could have been prevented by routine maintenance are often the hardest ones to repair.

Most electric vehicles on the road today are like computers on wheels, and thus, they require over-the-air updates as frequently as once per month. Keep customers informed about software updates provided by the EV manufacturer, as these updates often include performance improvements, bug fixes, and enhanced features. Keeping a vehicle’s software up-to-date ensures that customers benefit from the latest advancements and minimizes the risk of potential software-related issues.

How EV Repairs Can Cost More than a Combustible Engine Car

While EVs generally require less maintenance than traditional combustion engine cars, the mechanical repairs they need can be more costly. The specialized nature of EV technology contributes to higher repair expenses. Here are some examples of potential EV repair costs:

  1. Battery Replacements
    Electric vehicle batteries are crucial components representing a significant portion of the vehicle’s value. If a battery fails or degrades over time, replacing it can be an expensive undertaking. Battery replacement costs can vary widely depending on the make and model of the EV, but they often range from several thousand to tens of thousands of dollars. For instance, changing a Tesla Model 3’s battery costs about $16,000, the same price as a used Toyota Corolla!
  2.  Specialized Components
    EVs have intricate systems and specialized components that require expert technical knowledge and specialized equipment for mechanical repairs. Electric motors, inverters, and controllers are less commonly found or serviced than their combustion engine counterparts. Therefore, repairing or replacing these components requires the expertise of trained technicians, leading to generally higher repair costs.
  3.  Limited Repair Network
    The availability of repair facilities and technicians trained to work on EVs may be limited in some areas. On the other hand, repair shops for traditional fuel-powered vehicles are much more common and conveniently located. As a result, EV owners may need to travel further or rely on specialized repair centers, which can increase repair costs and inconvenience.

The Perks of a Vehicle Service Contract

To safeguard against unexpected repair costs and provide peace of mind, EV owners should consider investing in a vehicle service contract offered by their dealership. Buying a vehicle service contract typically happens when the factory warranty expires. By purchasing a vehicle service contract (VSC), EV owners can enjoy the following benefits:

  • Financial Protection: According to the National Automobile Dealers Association, electric vehicle repairs cost an average of $1,712. When a vehicle owner has a VSC,  the cost of covered repairs is taken care of, minimizing the financial burden on the vehicle owner. Instead of paying out of pocket for expensive repairs, a vehicle service contract covers the costs, providing financial protection and predictability.
  • Peace of Mind: Knowing that a VSC covers impromptu repairs can alleviate worries and uncertainties associated with potential breakdowns or failures. EV owners can drive with confidence, knowing that their vehicle is protected against unforeseen, expensive repair costs.
  • Convenience: With a VSC, EV owners can access an extensive network of authorized repair facilities and technicians specializing in EVs. This ensures that repairs are performed by trained professionals who understand the unique intricacies of electric vehicles, maintaining their integrity and reliability.
  • Long-Term Savings: Over the lifespan of an EV, repairs can accumulate and become costly. A vehicle service contract can potentially save owners a significant amount of money, especially when repairs involve specialized components such as batteries, electric motors, inverters, and controllers.

When considering a vehicle service contract, it’s essential to review the coverage details, including the duration of coverage, covered components, and any deductibles or exclusions with customers. When a customer purchases this coverage from your dealership, they should feel that they are choosing a reputable provider with a track record of reliability and excellent customer service.

Marketing Vehicle Service Contracts for Electric Vehicles

As the electric vehicle market expands, understanding the impact of extended coverage becomes paramount for EV owners and automotive industry professionals. While EVs may offer long-term cost savings and environmental benefits, it’s crucial to acknowledge the potential for higher repair costs due to specialized components and limited repair networks. By investing in a vehicle service contract, EV owners can protect themselves against unexpected mechanical repair expenses, ensuring peace of mind and long-term financial stability.

At Automotive Product Consultants, we offer automotive post-sale marketing programs at no-cost to dealers. These programs market to your customers and educate them about the benefits of buying additional coverage from your dealership, including information about coverage on electric vehicles.

We encourage dealers and agents to contact us to learn how Automotive Product Consultants can power a post-sale vehicle marketing program that will drive sales and revenue for your dealership. Reach out to us today for a free program demo.

Contact Us Today

At Automotive Product Consultants we always emphasize the power of increasing revenue beyond vehicle sales. There are many overlooked revenue opportunities in dealerships, but taking the time to realize them is a great way to transform the bottom line. These are four methods that owners and general managers of dealerships can use to increase revenue.