Electric vehicles are not a fad and will not simply go away. Major vehicle manufacturers are investing heavily in EV and battery production to accommodate expected demand in coming years.
That means consignors and auctions must plan today as EVs headed their way widen from a trickle to a steady stream demanding power while being reconditioned.
Two experts listed some of the key innovations defining industry trends during a session March 30 at the Conference of Automotive Remarketing.
- Zach Hallowell, vice president for Manheim Digital Marketplace and RMS Automotive, directs and coordinates the overall domestic and global operational activities for digital channels.
- Peter Grupposo, senior vice president of sales for Cox Automotive Inc., oversees the commercial sales, dealer sales, and market insights teams for Manheim and NextGear Capital.
6 Main Points for Planning Auction, Fleet, Dealer Electrification
The remarketing execs outlined some key trends emerging from fleet electrification:
- Auction operations should prepare for the influx of repossessed and/or turned over electric vehicles as more fleets acquire them, Grupposo said. The big challenge is to install or find enough chargers that can be sourced with power to handle EVs moving through the auction. EV charging times should fit with the typical turnaround times. Auction managers should figure out how fast they will need to charge the EVs, and whether to fully charge a vehicle.
- Fleets and auctions are advised to experiment with EVs and deploy them. The reconditioning, maintenance, and fueling of EVs all vary from those of ICE vehicles, requiring operations to adjust workflows and turnover times. “It's not just the battery,” Hallowell said. “It's a whole new interaction with a vehicle. It's exciting and creates other opportunities. How do you recharge a car? In the middle of an auction lot, you can't just bring a five-gallon tank of gas to fill it up.”
- Make sure you have technicians and staff in place to knowledgeably handle electric vehicles and manage the inventory.
- A major portion of the resale value of an EV depends on the quality and value of the battery. A battery could represent up to $10,000 of the value of an average EV being remarketed. Because the health of the battery has an outsized impact on the overall value, battery health scores are an essential tool. EVs with accurate battery scores likely will sell for a higher price. “Just by bringing that transparency, you're removing doubt and allowing the bidder to bid more because they know where that vehicle stands and that they won’t have a brick on their hands to replace.”
- New technologies will ease the process of repairing and replacing batteries. By focusing on the full cycle of an EV battery, evaluators can find components to reuse, remanufacturer, or recycle. Hallowell said: “Replacing a full battery pack at $10,000 when the car may be only worth $6,000 poses a challenging financial situation. If you can replace a few cells on the battery, for $1,000, that's a whole different proposition.” With improved processes and data, remarketers could be empowered to make better cost decisions.
- In planning for charging infrastructure, auctions and dealers need to think three years out, Grupposo said. What are the future needs of clients? What portion of your vehicle volume or fleet will be EVs? Where will you put the chargers? What investments should an operation make on equipment, electric units, power sources, and facility space? “Invest now.”