Retailers will increasingly face disruption stemming from mistrust in electric vehicle (EV) valuations, increasing vehicle recalls, and the emerging EV servicing gap, according to data experts ADS.
A collapse in confidence in EV residual values is set to increase retail prices, as manufacturers adjust pricing strategies to mitigate potential losses.
ADS highlights the impact of the Zero Emission Vehicle (ZEV) mandate, which requires EVs to account for 28% of new sales, intensifying the pressure on manufacturers.
Jon Sheard, operations director of ADS, stated: “Disruption of this kind – especially during a cost-of-living crisis – will make the market very difficult for everyone, including consumers, in 2025.
“Pricing will become a balancing act, and data insights will be critical in restoring confidence and adapting to new residual value forecasting approaches. The industry’s resilience will be tested in a way not seen since the 2008 financial crisis.”
The rapid pace of EV development, coupled with advanced battery technology and software, is expected to drive a rise in vehicle recalls. ADS suggests that accurate customer databases will be critical for managing these recalls effectively.
Sheard noted: “Although recalls are a problem, they also represent a major opportunity for dealers with up-to-date customer records. Each recall is a chance to sell additional services or even secure a further sale.
“Data-cleansing and even real-time customer detail updating will be more important than ever before as dealers face a market in flux.”
As EV adoption grows, the reduced servicing needs of electric vehicles will also threaten the dealer’s traditional revenue stream.
ADS recommends that dealers pivot to innovative revenue streams, such as EV diagnostics, battery health checks, and software updates, while focusing on customer retention. Tyre rotation – a common practice in the US – is cited as an example of a service that could improve customer engagement and boost profits.
Jon Sheard said: “The challenges and threats we have identified for 2025 are not insurmountable, but they make it clear that business as usual is no longer an option.
“While dealers typically prefer to focus on the exciting work of selling products the reality is that concentrating on disciplined customer data management to maintain relationships will be more important than ever before if dealers are to survive this period of transition.”
“Those dealers who finally confront the quality of their customer records and relationships now have an opportunity to open their lead over the competition and become leaders in the transition to a lower carbon world.”
