Tesla
- Dealers lose in the race to get an electric truck in consumers' driveways.
- Dealers have more to lose than manufacturers, who book revenue once the truck leaves the factory.
- Order banks are only going to get riskier as EV adoption increases.
In an electric truck market where buyers are placing bets on what will arrive first, dealers are likely to be the ones left in the lurch.
Tesla's Cybertruck is finally leaving the factory, placing yet another contestant in the race to consumer's driveways. While startups like Rivian have struggled to complete orders, and legacy companies like Ford and GM have slower production on their electric trucks, Tesla has an opportunity to deliver its trucks more efficiently and lap competitors that actually beat them to the market, some industry experts say.
No matter whose truck arrives first for the people who have put in multiple orders, the biggest losers will end up being dealers who have taken early customer orders, said Karl Brauer, an automotive analyst for iSeeCars.
If a Lighting or Hummer order arrives and the customer has already taken delivery of a Rivian, for example, the dealer now has that electric truck sitting on their lot without a guaranteed buyer.
"There's consumers out there and the cars are produced, and the bridge between those is the dealer," Brauer said. "Dealers are in this very tough spot where they are expected to continue to absorb these vehicles that manufacturers are producing."
Dealers are the canary in the coal mine
Some Ford dealers who spoke with Insider recently said that they're already turning away some electric vehicle allocations as demand for the cars dries up. And Ford isn't alone. Even Tesla, as it rolls out the Cybertruck, has struggled with bloated inventory this year.
This is all a sign of the trouble to come with EV adoption as the market surpasses the early-adoption wave, industry analysts and executives have said. Listening to dealers about where the demand pendulum is swinging will be crucial for car companies as they roll out more and more electric models in the coming years.
"Dealers know in real time with real-time feedback what the market is doing," Brauer said. "They have always acted as the first warning lights on the dash for the automotive industry."
Dealers also have more to lose than the manufacturers. Car companies that use dealers book revenue on a car once it leaves the factory (that's one of the biggest advantages legacy car companies have over startups that use a direct-to-consumer model).
Holding unsold inventory on their lots costs dealers money, and getting rid of a slow-seller usually means they'll have to take a loss with discounts.
Order banks will be more risky in the next few years
As EVs make up more of the market – they're heading toward 10% of the US within the next few years – the kinds of customers EV sellers are dealing with are going to change. That will create more risks, said Jessica Caldwell, and automotive analyst for Edmunds.
Early adopters were purchasing EVs for more emotional reasons, and were more willing to wait, wade through spotty customer service, or deal with a vehicle that had more glitches and quirks. The industry has largely burned through those customers now, and the average car buyer will be less forgiving.
Add on top of that, an automotive market that is returning to some sense of normalcy after the pandemic and a global shortage of computer chips sent everything out of whack for the last three years. And the balancing act of selling EVs to the average customer with a long wait time becomes an even riskier endeavor.
"Last year, everything was flying off the shelves and we were all on long waitlists, whether you were buying an EV or not," Caldwell said. "As inventory comes back to more normal levels, the average customer isn't going to be as patient. And that's going to be the nature of the game for at least the next five-to-seven years."