ATTRACTING ALL COMERS

The move to a future of electric vehicles isn’t just a business change for the automotive aftermarket or the automotive industry as a whole.

The electrification movement is attracting what feels like every imaginable industry to automotive. From payment terminal companies to property management to business advisory services, those are just a few examples of organizations seeing an opportunity to cash in thanks to the expanding EV marketplace.

They’re hearing industry experts like Guido Vildozo, senior manager of Americas light vehicles sales forecasting at S&P Global Mobility, who advise that regulators are “not joking” when it comes to the mandate to stop the sale of gas-powered consumer vehicles by 2035.

The road to get there can be debated — does the deadline move; or are internal combustion engine vehicle sales held back to increase the percentage of zero-emission vehicles and make the math work? But we’re moving forward, of that there is no doubt.

So outside industries see opportunities. Which leads one to wonder: What about those inside the industry? What is the future of automotive aftermarket suppliers whose business relies on its components working with an internal combustion engine? There are fewer parts in an electric vehicle so we will eventually see a drastic reduction in demand for their parts.

This is not an attack on them but a hope that plans for the future are being made. Their market share still dominates. EVs make up not even a full percentage of vehicles in operation. So they’re doing fine today. But their market isn’t growing. How much longer will they be "fine?"

A special report from S&P Global Mobility, included as part of the cover story in this issue, highlights the need for suppliers to, in essence, get on with it. Make robust plans. End the denial.

We’re seeing that from some traditional aftermarket players. Liqui Moly, which has made its name as an oil specialist, is one example. As it has expanded to other areas of chemicals, lubrication and additives, it's examining what liquids are needed for electric vehicles. It has developed several options.

Mahle is seeing opportunities in thermal management and electrification in general. It expects electrification to be a major driver of its bottom line as it offers more solutions in the area. It has teamed up with another company for battery services.

President & Managing Partner | Delon Rashid

Head of Sales & Managing Partner | Peter Bulmer

Corporate Office

48 Lumsden Crescent, Whitby, ON, L1R 1G5

Those are just two examples. There will be others. There should be others. There are many opportunities to transform as we move through the electrification cycle. There are emerging business prospects for a variety of industries. I bumped into two friends outside the industry at a recent EV expo because their companies are looking for opportunities pretty much in our backyard. Will we sit back while they move in?

Apart from shifting, S&P sees the following options for suppliers: Aim to be the dominant parts supplier, milk the cash cow dry and turn off the lights on the way out or set up to be acquired. Let’s see which path they take.

Adam Malik Managing Editor, CARS

ISSN 2368-9129 Online 2368-9137

When Evs Are Expected To Impact The Aftermarket

There are a whole bunch of 1st gen BEVs out there with mileage above 60,000 km and will probably need some repairs. In areas where salt usage is high in the winter, brakes will corrode no matter what. The aftermarket needs parts now, not in 2030. The volume might not be high, but it is a real opportunity to secure customers early. We are having the conversations now with customers.

Shawn Greenberg, Seamless Auto Care

EV WORRIES DROP AFTER PURCHASE: STUDY

Why has nobody looked into the long-term costs of owning an electric vehicle? Raw material commodity prices are rising steadily causing price increases in new vehicles midyear. What is the long-term prognosis for future battery replacement costs? These projections will definitely hurt longterm ownership. Used EV sales will be an interesting topic after vehicles are five years old.

Bob Ward, The Auto Guys

The Province With The Most Eager Ev Shoppers

I’m sure it’s just a coincidence that Quebec is offering major cash bribes to customers buying EVs. It’s also nice that the rest of Canada is subsidizing such spending, as well as their cheap electricity. Everything is easy when someone else is paying the bills.

Geoff, reader

WHY ELECTRIC AND NOT OTHER TECHNOLOGIES?

At the turn of the last century when the automobile was first invented, multiple forms of power were introduced concurrently. What developed were the technologies that made sense for the applications. It has never worked when change is legislated. There are too many applications where electric simply won’t work without negative economic impacts. Let technology develop the future.

Kim Stankiewicz, Performance Initiatives

HOW MANY EVS TO EXPECT IN 10 YEARS, AND WHY

With the government mandating these changes is there going to be some sort of subsidy or buy out for shop owners? When tobacco was deemed "bad" by the government, the farmers in my area received a buy out. It would only seem fair in this case to offer something since it is the government that has deemed the ICE as “bad.”

Doug Dykstra, Dykstra Automotive

Our governments and manufacturers have done a tremendous job marking this commodity as a green vehicle. The truth is it is not only far from green but also it is not affordable for the average consumer. While EV technology has a place in our society, it is not for the average consumer. Our government and manufacturers are dependent on the average consumer to purchase this commodity for our economic stability. If the average consumer holds on to their vehicles longer than normal or gives up this commodity altogether because they can not afford an EV, our government and manufacturers are going to be in a whole world of hurt.

Rob Nurse, Bob Nurse Motors

Ev Driver Expectations Shifting

NOW THAT CONSUMERS have more options for buying a battery electric vehicle, their focus is turning to more traditional factors that make up vehicle satisfaction, according to J.D. Power.

Factors like styling and quality are now top of mind as more mainstream — and affordable — options hit dealerships, the J.D. Power 2023 U.S. Electric Vehicle Experience (EVX) Ownership Study found.

“The electric vehicle landscape is changing quickly, and newer models are bringing in more mainstream, first-time EV buyers,” said Brent Gruber, executive director of the EV practice at J.D. Power. “Recent vehicle launches from both new brands and traditional automakers have had a profound effect on what factors are most important in the ownership experience. Today’s EV owners are looking for quality, reliability, driving enjoyment, safety and technology features.”

The study found a difference in what’s most problematic when comparing mass market and premium EVs. For the mass market segment, most vehicle owners reported most issues with the vehicle’s infotainment system. For premium EVs, most complained about squeaks and rattles

Public charging options also divided the segment. As Tesla is the leader in the premium segment, the company has its own network of chargers. Owners in this category to give a score of 589. But mass-market EV owners are relying on those installed by private companies or the government, giving this area a score of 341.

“The EV marketplace is dynamic and the important factors that manufacturers need to watch will vary based on their history and experience,” Gruber said. “First-time EV buyers who are more mainstream will compare their EV’s build quality to what they know about gas-powered vehicles.”

Towing satisfaction is up; notably, those who use their EV for towing are more satisfied than those who have not towed.

“Truck manufacturers that proactively communicate the effect that towing has on range — like they do with gas mileage — seems to help set owner expectations,” J.D. Power’s report said.

Zev Increase Market Share

ABOUT ONE OUT OF every 11 vehicles bought in Canada in the first quarter of 2023 was a zero-emission vehicle, up almost a full percentage point compared to the same time last year.

While year-over-year data from S&P Global Mobility shows overall increases, a quarter-by-quarter analysis shows a possible shifting trend as the trajectory moves upward.

Battery-electric vehicles accounted for almost 7 per cent of market share, with total volume jumping by 19 per cent, S&P reported. Hybrids had an adoption rate of 8.7 per cent while plug-in hybrids had a share of 2.2 percent in the first quarter. The total number of ZEVs jumped by 18.2 per cent.

Internal combustion engines made up 82.2 per cent of the total share last quarter — a drop from 86.1 per cent reported in the first quarter of 2022.

However, when comparing S&P’s data from the first quarter of 2023 to the last of 2022, there has been a shift in which vehicles Canadians are moving towards. At the end of last year, BEVs had an 8.4 per cent share, hybrids had a 7.1 per cent adoption rate, while PHEVs were at 1.8.

So while year-over-year comparisons show growth across all segments, quarter-by-quarter analysis suggests Canadians are moving more towards a hybrid option.

Looking ahead, S&P observed that 41 new BEV models are scheduled to be launched in the Canadian market in 2024.

“These new models aim to target various vehicle segments, including the introduction of new entrants in the light-duty pickup truck segment, which addresses specific challenges for adoption where product availability is lacking (e.g. GMC Sierra EV, Hummer EV and Chevy Silverado EV),” it said.

That means there will be a greater number of options for Canadian consumers, S&P added.

U.S., CANADA, TEAM UP ON EV CHARGING CORRIDOR

A 1,400-KM corridor for electric vehicle charging stations is set to be built from Michigan and stretch into Quebec.

The joint binational alternative fuel corridor agreement was announced by federal Minister of Transport Omar Alghabra and U.S. Secretary of Transportation Pete Buttigieg. It will see EV charging stations every 80 kilometres along highways from Kalamazoo, Michigan to Quebec City.

Each station along the corridor — covering the I-94 through the Detroit-Windsor border tunnel, Highway 401 across southern Ontario, Highway 20 through Montreal and Highway 40 through to Quebec City — will be required to have at least one direct current (DC) fast charger along with combined charging system (CCS) ports.

There will be 61 stations between Detroit and Toronto and 154 between Toronto and Quebec City.

This new plan will expand travel capabilities for EV owners as well as reduce concerns around range anxiety.

“This first cross-border alternative fuel corridor will help drivers to travel across the border and charge or refuel worry-free,” Alghabra said in an announcement. “It contributes to bringing us another step closer to making our air cleaner while helping people save money on traditional fuels.”

Recalls Drive Down Ev Service Satisfaction

AN INCREASING NUMBER of battery electric vehicles are being serviced at dealerships, leading to a decrease in overall customer service satisfaction, a study recently found.

Overall customer satisfaction with the service experience dropped, according to the J.D. Power 2023 U.S. Customer Service Index (CSI) Study. But the drop was led by owners of BEVs — owners of internal combustion engines were more satisfied.

Recall rates are more than double for BEVs compared to their ICE counterparts. Service advisor knowledge is also not as strong when it comes to electrics. Both were reasons for customer service satisfaction among owners of BEVs being 42 points lower than among owners of ICE vehicles.

Overall satisfaction sits at 846 on a 1,000-point scale in this year’s study, a drop of two points.

A leading factor is that, as noted, recall rates are more than double for BEVs than their gas and diesel counterparts. Additionally, service advisor knowledge continues to be a major satisfaction issue among BEV owners who provide a rating of 8.01 (on a 10-point scale) compared with 8.59 among owners of ICE vehicles.

“As the electric vehicle segment grows, service is going to be a ‘make or break’ part of the ownership experience,” said Chris Sutton, vice president of automotive retail at J.D. Power. “The industry has been hyper-focused on launches and now these customers are bringing their electric vehicles in for maintenance and repairs.

“As training programs for service advisors and technicians evolve, EV service quality and customer experience must address both the vehicle and the unique customer needs. The EV segment has the potential to spur massive convenience improvements in how customers service their vehicles — but we’re not seeing the benefits yet.”

FORD, GM TO USE TESLA’S EV CHARGING NETWORK

FORD AND TESLA HAVE agreed on a partnership that will see the Detroit-based automaker adopt Tesla chargers on its electric vehicles, making them accessible to Tesla’s network.

It’s a move that surprised many industry analysts who have noted Tesla’s preference to operate in its own bubble and ignore attempts to standardize the industry in areas such as chargers.

CEOs from both companies announced that future Ford EVs — such as the Mach-E and Lightning — will incorporate the Tesla connector from 2025. Current Ford EV owners in Canada and the U.S. will be able to access 12,000 Superchargers starting in the spring of next year via a CCS-to-Tesla connector.

Days later, GM announced a similar deal with Tesla. The move gives the automakers access to Tesla’s own network of charging infrastructure, giving them a market advantage over other automakers that are only able to rely on public infrastructure.

In return, Tesla will keep a large portion of revenue from the charging stations.

EV WORRIES DROP AFTER PURCHASE: STUDY

COMMON CONSUMER complaints about electric vehicles seem to go by the wayside after purchase, a study has found.

Calling it the largest-ever survey of Canadian EV drivers, the Canadian Automobile Association also reported that an overwhelming majority would buy an EV again. But they are concerned about the lack of public charging options.

Other concerns like including driving range, cold weather performance and battery degradation drop after purchase, CAA found when asking more than 16,000 EV drivers across the country.

These drivers told CAA they spend 30 per cent of their time charging away from home. That’s why 44 per cent of them still worry about public infrastructure.

CAA also found that more than a third (36 per cent) are not confident about in taking road trips in their EV. Most EV drivers (67 per cent), it observed, still own a gas vehicle, which they are more likely to use for longer journeys.

"We know EVs are gaining sales, but a lot of people still have questions,” said Ian Jack, vice president of public affairs for CAA National. “We think this research — into the actual experiences of EV drivers in Canada — sheds an important light into where the real pain points are, and where potential buyers can perhaps worry less."

As for the concerns that did reduce, those around range fell 37 percentage points to 30 per cent; cold-weather performance concerns dropped 25 percentage points to 33 per cent; and fears about battery degradation fell 41 percentage points to 13 per cent.

The survey also found high satisfaction rates among Canadian EV drivers. Nearly all (97 per cent) reported that they will purchase another EV when it’s time to replace their existing one. Almost nine in ten (89 per cent) said they enjoy driving their EV more; 95 per cent say their EV is more affordable; and 92% say their EV is a quieter ride than their gas vehicle.

HOW WILL TECHNICIAN JOBS BE IMPACTED BY EVS?

AS VEHICLE ELECTRIFICATION grows, jobs in the bays will be impacted, a panel of experts agreed. But there may not necessarily be a loss of jobs, but a call for different skills for new jobs.

A panel of speakers were asked at Centennial College’s recent Driving the Future 2.0 event about what the future of technician jobs was going to look like as electric vehicles grow. With fewer parts and components to work on, how concerned should the industry be?

“We’re going to definitely eliminate some of the more simpler jobs, for lack of a better term,” observed Rob Morrison, Canadian fixed operations manager at Phaff/Lithia.

With electrification, oil and changes will go by the wayside, he noted as an example. Instead, being able to work with electrification will be a required skill set beyond what you find in many bays these days.

“We’re talking about battery repairs and battery specialists, high voltage experts; we’re talking about the ability to work on incredibly complex and advanced vehicles and systems,” Morrison added.

He brought up LiDAR and radar — it’s hard enough to understand how they work, let alone fix it. But technicians need to know.

“That’s what’s changing,” Morrison said. “This is an incredible lift in the skill set and to recognize that skill set is of value.”

David Cochrane, regional sales manager at Delphi, said there will be many new jobs popping up. He pointed to a company that is doing ADAS calibrations. Being able to do this type of work is fairly new.

“So there is a shift, but there’s still going to be a large amount of positions available,” he added.

Pierre-Hugues Comiré, regional field technical manager at Hyundai Canada, agrees there will be a shfit — there won’t be less work, just different work. Technician jobs will be replaced by a different type of position.

Careers lost by the reduction of jobs related to ICE vehicles “will be made up by analytical thinking skills needed for diagnosing networks, for dealing with electrification and driver assistance technology that’s in vehicles,” he said.

How Evs Are Becoming More Affordable

A NEW REPORT IS highlighting the continuing affordability of electric vehicles in addition to the fact that running costs remain stable when compared to internal combustion engine vehicles.

The Zero Emission Transportation Association (ZETA) released a report showing that EVs continue to be more affordable for drivers. It also highlighted that EVs are more price stable when looking at cost to operate as gasoline prices have fluctuated greatly for more than a year while the cost per kilowatt-hour of electricity has remained stable.

In other words, electricity is more insulated from price fluctuations compared to gas-powered vehicles, noted Albert Gore, executive director of ZETA. “Ensuring that [families] can travel affordably requires better protection from fluctuating oil prices. Electric vehicles provide that protection.”

EVs, the group highlighted, operate independently of global oil and gas markets, making their operating costs not subject to fossil fuel price shocks, disruptions and supply shortages.

It also noted that driving an EV can be 4.5 times cheaper than a gas-powered vehicle. “EVs are markedly cheaper to drive per mile — and experience far greater price stability — than gas-powered vehicles,” ZETA’s report synopsis said.

Fears That Evs Will Collapse Parking Garages

EXPERTS ARE WARNING that older parking garages may not be able to handle the added weight of electric vehicles.

As they grow in popularity — and as mandates ensure a higher EV population — concerns are being raised over whether current infrastructure can handle the weight.

A report out of the UK noted that aging parking garages should have the minimum weight they can hold raised, along with improved maintenance as neglect of the structures has experts concerned for their ability to hold the weight.

An electric vehicle can weigh much more than its internal combustion engine counterpart — the Ford F-150 Lightning can weigh 2,000-3,000 pounds more than the ICE version.

Structural engineer Chris Whapples, who helped author the report, observed that the situation could be disastrous in some cases.

“I don’t want to be too alarmist, but there definitely is the potential for some of the early car parks in poor condition to collapse,” he said, according to British newspaper The Telegraph. "Operators need to be aware of electric vehicle weights and get their car parks assessed from a strength point of view, and decide if they need to limit weight.”

Rising Rates Make Home Charging Less Appealing

RISING ELECTRICITY RATES have resulted in lower satisfaction with home charging, according to the J.D. Power 2023 U.S. Electric Vehicle Experience (EVX) Home Charging Study

More than two-thirds (68 per cent) of EV owners use a Level 2 permanently mounted station. But overall satisfaction declined 12 points year-over-year to 740 on a 1,000-point scale.

“Whether you’re an automaker, dealer or utility company participating in the EV ecosystem, improving the EV owner experience with respect to home charging should be a common goal shared by all,” said Brent Gruber, executive director of the EV practice at J.D. Power. “There are programs available today that will help EV owners with the startup costs, such as installing or upgrading to a faster Level 2 charger. There are also programs designed to save EV owners money with the ongoing costs of charging their vehicle, like scheduling to charge during the most affordable time of the day. However, J.D. Power sees that there is little awareness and utilization of these benefits.

“As the EV marketplace continues to grow, brands that help owners take advantage of these offerings will be in a much better position down the road.”

By The Numbers

Stats that put the North American automotive aftermarket into perspective

14.9%

British Columbia leads the way in Canada with the highest rate of battery electric vehicle adoption among all provinces.

68%

97%

There is high satisfaction among Canadian EV drivers. Nearly all reported that they will purchase another EV when it’s time to replace their existing one.

43% media, accounting for nearly half the share. Ford was second at 13 per cent. GlobalData

Many EV owners use a Level 2 permanently mounted station at home. Rising electricity rates reduced satisfaction with home chargers, however.

67%

3X

Mahle expects the sales potential of components tied to electric vehicles to be three times higher when compared to internal combustion engines.

Many EV drivers still have a gas-powered vehicle in their driveways. They are more likely to use it for longer journeys.