THE PAST AND THE FUTURE

The automotive aftermarket is in the middle of a unique opportunity. It can benefit from traditional vehicle technology for decades to come — and set itself up to benefit from incoming electrics

// By Adam Malik

Electric vehicles aren’t coming. They’re here.

Automotive aftermarket service and repair shops across Canada are seeing EVs roll in. Whether it’s for tires, HVAC issues or battery problems, consumers are looking for alternatives to the dealer when in need of maintenance and repair needs.

The good news is that there isn't an avalanche of service requests as the car parc is small. There is time. Not as much as one may think, but enough to get prepared.

It’s expected that electrified components will make up about 4 per cent of the replacement parts market by 2030. Not very much, acknowledged Paul McCarthy, president of MEMA Aftermarket Suppliers — a group made up of the unification of three aftermarket-focused groups under the Motor & Equipment Manufacturers Association.

“So most of what we’re selling at 2030, is what we’re selling [currently],” he pointed out during the recent MEMA Global Summit.

Even looking out to 2045, the majority of the aftermarket will be driven by segments industry professionals know well and sell.

“So I think one of the takeaways is that we have this long, fat tail — and we think profitable tail — for existing businesses,” he said.

But the growth of electrification isn’t something to put on the backburner, he stressed. The market is growing and will continue to grow due to demand from consumers, government mandates and automaker production.

“That is a market that we can’t ignore,” McCarthy said.

Even though today’s aftermarket products will continue to be the dominant segment in 20 years, they won’t be growing. Growth areas for the future are all on the electric side of the spectrum.

“So if we as business leaders want to grow at the pace of the market, we need to be prepared for that,” he said.

That means the industry can’t put its collective heads in the sand. “We do need to innovate. And we are seeing the entrepreneurial aftermarket respond to this opportunity to say there is a place for EVs,” he observed.

Less but more

There will indeed be fewer components on electrics that need servicing. But that doesn’t translate into lost revenue for the aftermarket.

“There’s going to be a shift in some of the segments,” McCarthy said, highlighting drive belts, spark plugs and the routine oil change as areas that will see gradually reduced demand.

He pointed to tires, the “poster child” of a part of the electric vehicle that will require replacement far more often than on an internal combustion engine vehicle. The weight of an EV alone wears them out faster.

“One of the cool things about EVs is you get 100 per cent of the engine torque … That’s fun to drive but it also wears out tires,” McCarthy said.

To improve range, low-rolling resistance tires are typically installed on EVs. But they wear out faster and are more expensive than typical ones. Noise also becomes an issue with EVs. Without the hum of the engine in the background, drivers hear more road noise. So EV tires have a foam insert to reduce noise — adding to the cost of the tire.

“So we’re talking about the impact of EVs on tires is a lot more money, a lot more replacement,” McCarthy explained.

He pointed to suspension as well, which takes an added beating thanks to the extra weight of an EV. Lightweighting is playing a role — reducing weight to increase range makes components more fragile. “Without that white noise machine of the ICE engine, consumers feel the motion of the car more. It’s an interesting dynamic — we have sensory deprivation without the engine [and] we feel this more,” McCarthy said. “So you see more sophisticated, more expensive suspensions on EVs, as they also deal with the weight of that vehicle. So when something does need replacing, it costs more.”

The HVAC system of an EV is also far more complicated than an ICE vehicle. He singled out the Ford Mach-E, which has 30 different hoses and 60 feet of hose under the hood.

And the HVAC system of an EV is paramount to the health of an EV — it needs to keep that battery cool.

“It needs to make that battery work well because, otherwise, you’re going to ruin or take the lifespan off this $20,000 battery pack,” McCarthy said.

Perhaps the most important job of the HVAC system is to keep the driver and passengers safe. The cooling system is now also a safety system — it needs to operate properly or else the vehicle is at risk to catch on fire.

“We thought the market was going to shrink. It’s actually going to expand quite significantly,” McCarthy said about this segment.

Attention to detail

Anyone even thinking about working on an electric vehicle needs to pay close attention to everything they do.

Ignoring the details or not respecting them could have serious consequences.

“We don’t need to be scared, but we should be respectful,” said Ben Johnson, director of product management at Mitchell 1, during a past AAPEX session.

His quick advice: If it’s orange, don’t touch it. Mess around with it improperly and you could have 800 volts going through your body. “Just need to have some common sense,” he said.

Better yet, if you haven’t been trained or are otherwise not qualified to work on an EV, then stay away, advised Jake Rodenroth, manager of body repair program operations at Lucid Motors during last fall’s Technology Conference hosted by MEMA Aftermarket Suppliers.

“The thing about EVs is, as a repairer, you can either hurt them, or they can hurt you. So if you’re not qualified to work on one, you’ve never been through the approved training and do not have the approved tooling, it’s just not worth it to take on something like that until you’ve done so,” Rodenroth explained.

EVs can’t be worked on like an ICE vehicle — there’s no ‘learning as you go along.’ One mistake can be fatal.

“You’re either going to hurt yourself, or you’re going to damage a very expensive component in a high-tech vehicle,” Rodenroth said. “And I don’t think we want either one. So I can’t stress the training and tooling part of it enough.”

Preparation

Chris Besemer, owner and president of CG Motorsports in Richmond, B.C., explained the process of moving into servicing electrics.

His shop specializes in BMWs, a brand that has had an electric model since 2014 when it introduced the i3. Last year, he made the move to make his shop fully capable of servicing electrics. That meant having a sectioned-off area, getting grounding stations, mats and the like.

In a conversation with then-Automotive Industries

Association of Canada chairman Jason Yurchak during an episode of Curbside Chat, he compared the work area to a hospital room. The area is barricaded off with signs warning of high voltage. No one is allowed to enter the area when an electric vehicle is being worked on.

“It’s really just outfitting the shop with safety zones and lights for high voltage — ‘working area, stay clear’ and stuff like that,” Besemer said.

He didn’t see the expense of the upgrade as a burden. There are unique items like battery charging stations that need to be installed — but it’s no different than in years past when shops had to invest in new tools and equipment as vehicles changed, like when OBD-II ports became the standard.

“It’s just the cost of doing business,” Besemer said. “In a nutshell, it’s nothing that we’re not used to. Running a shop, you have to spend the money sometimes to keep yourself current. And this, it’s new stuff that we’re buying, but it’s not [an] extra expense for anything that’s above and beyond from what we’re used to.”

Hard to beat this industry

The automotive aftermarket has a bit of an advantage when it comes to stability and strength going forward. The future is coming by way of electrification and can be seen — but the traditional market is still here and going to be a primary source of business for years to come.

“So what that means for us is we have two challenges,” McCarthy observed. “The first is the journey may be as important as the destination — you can’t just run to the future and ignore the present. We need to manage our profitability across both of those.”

This is not an opportunity to be squandered, he stressed.

“[It] is so rare in the business world to say, ‘We know somewhat of what this future looks like.’ We need to grow our businesses, be prepared for that and take advantage,” McCarthy said.