'EV Sherpas': Car dealers are carrying us into an electric future

At Jacques Olivier’s Hyundai dealership in Saint-Basile Quebec, about an hour’s drive south-east of Montreal, the multiple onsite charger stations are always busy. 

Three rows of shiny new EVs have been strategically parked to be visible from nearby Highway 116, with Olivier’s best sellers — including the IONIQ 5, KONA and IONIQ 6 compact SUVs — the most prominent. 

Inside the dealership — one of more than 25 owned by Groupe Olivier across Quebec and New Brunswick representing a dozen manufacturers — the showroom is all EV with not a single internal combustion engine (ICE) model in sight. 

EVs accounted for over 20 per cent of total sales across Groupe Olivier, with Hyundais moving faster than any other brand last year. At Saint-Basile, more than 50 percent of the vehicles sold were EVs.

For those buyers still on the fence, battery “range anxiety” remains the number one issue, Olivier said. As a result, nothing is hotter right now than plug-in hybrid vehicles.

“Those are the ones that everybody wants, because it’s the right combination of gas and electric,” Olivier told Canada’s National Observer. “All the OEMs are having problems right now supplying the demand,” he said, referring to original equipment manufacturers of components and parts for electric vehicles. 

Quebec and British Columbia have been the two hotspots for EV adoption in Canada thanks to generous government rebates, but those incentives are on the wane. 

The B.C. government has trimmed the number of electric and hybrid models eligible for its rebate program, and it’s unclear how much is left in its Go Electric fund.

Quebec is phasing out subsidies for new EV purchases and home charging infrastructure, including a $7000 provincial rebate for purchases of new fully electric vehicles, the richest incentive in Canada, which dropped to $4000 in January and will eventually expire.

In late 2024, Quebec consumers raced to max out on subsidies and the province saw a spike in EV sales in the final two months of the year. 

The future for EV rebates – which currently do not exist in Ontario, Alberta, Saskatchewan, Nunavut and the Northwest Territories – looked more bleak in January when Ottawa said it would no longer offer a federal rebate of up to $5000 on new EV purchases. 

The federal program wasn’t so much a cut, officials explained, but exhausted — a victim of its own success. The demise of this incentive prompted federal NDP leader Jagmeet Singh this month to propose not only bringing it back, but doubling the maximum rebate to $10,000 if the EV is made in Canada.

New generation of EV buyers?

It’s at the car dealership — where the test drives occur, and the pros and cons of EV ownership are most closely scrutinized and considered — that EV adoption occurs.

The surprise federal announcement left many of Canada’s 3400 automobile dealerships dangerously exposed in an EV market that is already facing headwinds in spite of the growing popularity of many models. 

Early adopters have already bought their EVs, leaving mainstream buyers on the fence, wary about charging infrastructure and battery range. Mass confusion over potential U.S. tariffs have also thrown the very future of Canada’s automotive industry into question, just as the COVID supply chain hangover was lifting.

“Early EV adopters have already been captured by the market,” said Charles Bernard, lead economist at the Canadian Automobile Dealers Association. “Those are the people really interested in the technology, and they were ready to absorb some of the challenges that came with buying an EV early.” 

But the question remains. In the absence of federal incentives and the prospect of waning provincial subsidies, how will car dealerships — the contact point for most people who decide to buy — attract a new, more mainstream generation of EV buyers? 

Dealerships occupy a critical space in the EV supply chain: they are on the front lines of EV adoption. In Canada, they include small independent businesses that work on the classic retailer model: they get inventory from a manufacturer, and represent that brand in the retail space. 

There is a trend towards consolidation that has seen major players like Groupe Olivier and the Dilawri Group, Canada’s largest automotive group with 83 dealerships representing 38 automotive brands, gobble up smaller players. 

But the sales model is largely unchanged. Once a vehicle is on the lot, the dealership basically owns it, and it’s up to them to move it. “As soon as it hits your lot, you're paying for it,” Bernand said of the typical dealership model. “So there's a lot of financial pressure.”

Not surprisingly, the abrupt end of federal rebates was nothing short of a crisis for many dealerships. With no advance warning, dealerships who had awarded the federal subsidy to recent EV buyers, but had not yet processed the federal rebate paperwork, were technically on the hook for the rebates. In the end, multiple auto manufacturers stepped in to cover the rebates for EVs already sold to consumers under the federal program.

Adding to the pressure to move EVs off the lot are mandates imposed by the federal government, as well as separate mandates in Quebec and B.C., to phase out ICE vehicles by requiring at least 20 per cent of new vehicle sales by 2026 to be zero-emission, rising to 100 per cent by 2035.

“Pro-EV, anti-mandates”

Bernard’s dealer group, which he says is “pro-EV, anti-mandates”, joined forces with two Canadian auto manufacturing associations in January to launch a campaign to convince Ottawa to drop their EV mandates. 

This effort happened around the same time that the new Trump administration revoked an executive order by former President Joe Biden calling for half of all new vehicles sold in the U.S. to be EVs by 2030. 

The gist of the anti-mandate argument in Canada is: if the federal government and provinces are lowering and eliminating subsidies to buy EVs, which come at a significant premium to ICE vehicles, how and why are manufacturers and dealers expected to hit the ambitious 2030 targets? And do it when the necessary charging infrastructure has not been built?

It's important to note that for legacy manufacturers — such as Ford, General Motors and Toyota — and many dealers alike, EVs represent a significant disruption to business as usual. 

Dealerships face the potential loss of revenue from their service centers which do repairs and replace fluids for ICE vehicles. One early EV adopter told CNO that in six years of driving his EV — bought used no less — he has changed three wiper blades and the electrical coolant. 

Replacing tires is one service center bright spot. Heavier EVs will go through tires faster than conventional gas vehicles. But the era of oil changes every 7000 km and a litany of other expensive moving part repairs and replacements will disappear.

And while car dealerships remain the primary interface between buyers and sellers of new cars, Tesla, North America’s biggest seller of EVs, disrupted this model.

Buyers looking for a new Tesla can book a demonstration at a “Tesla store” and buy a vehicle directly from the manufacturer, often an online purchase. Tesla owners then track service history and future routine maintenance — for air filters, tire rotation and alignment, brake fluid, and more — via their vehicle touchscreen. 

When required, repairs can be scheduled with either a mobile technician, who will come to the owner, or by visiting a bricks-and-mortar Tesla Service Center, but scheduling is managed via an app. 

Moving forward, researchers at consumer intelligence company JD Power have put forward ideas about how dealerships can navigate the EV disruption — and how they will need to evolve and adapt to attract new EV buyers.

“Selling EVs isn’t just about the product; it’s about understanding fundamentally different customer bases,” wrote Srini Rajagopalan, JD Power’s managing director and practice leader of automotive advisory & analytics, in Green Car Journal. 

Dealerships, which have historically been focused mainly on sale transactions, need to “evolve into hubs for education and support,” he said.

Unlike many early adopters, mainstream consumers prioritize reliability, convenience and value, he wrote.

“For them, a car is a practical tool, not a project. They are accustomed to the seamless service and hassle-free experience provided by legacy automakers,” Rajagopalan said. “Mainstream buyers expect their vehicles to simply work, with minimal interruptions to their routines.”

To attract mainstream consumers, automakers will need to make significant investments in creating an EV ecosystem. “This means improving charging infrastructure, expanding service networks, and ensuring that software and hardware support systems are reliable and easy to use,” he added. 

Another strategy he proposed is to target relatively affluent, two-car suburban families that already have an ICE vehicle for longer trips.

“EV Sherpa” 

JD Ney, J.D. Power’s Toronto-based Director of Canadian Automotive Practice, takes the concept of a car dealership as an education-support hub a step further. Unlike the early adopter phase of EVs where customers would walk into a dealership and already be sold on the vehicle, the next generation of buyers have a lot of questions and apprehensions.

“A shopper today needs a guide, think of it like an EV Sherpa, to help them with all the new realities of being an EV owner.” That means the salesperson on the floor needs to understand the incentive landscape and how to apply, and if it’s still even an option. Do local utilities provide incentives or advice for consumers figuring out home charging? Does the dealership? 

During a recent visit to an Acura dealership in Vancouver, where provincial rebates are still currently worth up to $4000, a car salesman, who spoke on condition of anonymity, said his dealership has a relationship with a company called ChargePoint, which can help buyers set up Level 2 charging in their garage. He’s not clear on the details, but can connect a new EV buyer to this company. 

The lone EV model vehicle in the showroom — the ZDX SUV, a wonder of battery reliability with almost 500 km of range, has a manufacturer’s retail suggested price of $94,000 before taxes. This price tag, he added, triggers the additional BC Luxury Tax of 15 per cent.

In response to the mention of saving money with this EV from avoiding gas, he issues the following warning: “You know the $8 to $10 thousand you pay extra for an EV? Unless you drive at least 25,000 km a year, the gas savings won’t compensate for the premium you pay for the vehicle.” 

The math is open to question, but he touches on an important point: the key to getting more people into EVs in the future will hinge on how much we are forced to pay for conventional fuel. Even in a world of vanishing government subsidies, a leap of gas prices into the post-two dollar per litre stratosphere would be the best thing for the economics of buying a new EV.

The cost of gas is part of a wider value proposition that Olivier believes will propel EV sales beyond early adopters. There is a price premium for sure he says, but there is also the environmental benefit of not burning gas or diesel. 

And regarding range anxiety, there are 2025 EVs that take about 15 minutes to reach an 80 percent charge via Level 3, the fastest charging mode. And then there’s gas: his uncle replaced a conventional Nissan Pathfinder SUV with a Kia EV6, drove 26,000 km in the first year, and came out about $3000 ahead, buying electricity generated by Hydro Quebec instead of gas. “And you don’t have to go to the dealership three times a year for servicing either.”

Still, not everyone is convinced.

Back in Saint-Basile, Montreal retired couple André Labonté and Martine Letourneau, both 63, were kicking tires at Olivier’s Hyundai dealership recently and concluded that an EV will not work for them. 

They do long road trips and don't want to deal with the hassle of finding chargers and waiting to charge. “It takes [us] 5 minutes to gas up and we're on our way!" said Labonté. 

Letourneau chimes in: “Yeah, waiting to charge up, no it's not for me." 

(Additional reporting by Nasuna Stuart-Ulin in Montreal)