The Costs of Upgrading Australia’s Car Dealerships for Electric Vehicles Could Fall on Customers, Warns Lobby Group

Will customers have to foot the bill for the necessary upgrades to Australia’s car dealerships for electric vehicles?

The Australian Automotive Dealer Association (AADA) has claimed that necessary upgrades to prepare the country’s car dealerships for the transition to electric vehicles (EV) may result in customers bearing the cost of the billion-dollar investment. While the Federal Government committed $60 million towards EV charging upgrades, a report commissioned by the AADA found that the actual cost of these upgrades will be significantly higher. AADA CEO James Voortman has warned that the costs are likely to be passed onto customers, as carmakers are unlikely to cover the entire bill.

Last month, the Australian Automotive Dealer Association (AADA) welcomed the Federal Government’s commitment of $60 million for EV charging upgrades across car dealership networks.

Energetics, commissioned by the AADA, conducted an investigation and found that the upgrades required to support the expected influx of EVs will exceed the allocated funding.

The report revealed that the cost of these upgrades could range from $130,000 for an average regional dealer to $580,000 for a typical rural dealer.

AADA CEO James Voortman has cautioned that these costs, including specific tooling for EVs and retraining technicians, are likely to be passed onto customers, as carmakers are not expected to cover the entire bill.

Voortman emphasized the importance of investing in EV infrastructure and educating customers about EVs.

Dealerships will be responsible for installing chargers in showrooms and service departments as part of their franchise agreements with manufacturers.

In addition to providing charging facilities, dealerships allow potential buyers to experience charging firsthand and test drive charged vehicles.

Voortman highlighted that most new EV owners will have their vehicles serviced with an authorized repairer under the manufacturer’s warranty, making it crucial for dealerships to ensure that charging facilities are available.

The AADA has been critical of the Federal Government’s New Vehicle Efficiency Standard (NVES) and its watering down during the consultation process with industry stakeholders.

Voortman acknowledged that while the NVES is not the standard the industry requested, the Government had made significant changes to its original policy to strike a balance.

The AADA is committed to working with the Government on various issues, including ensuring compliance at the point of sale, automotive franchising reform, and addressing the investment required by dealerships during this transition.

Voortman stressed the importance of collaboration between the Government and industry to identify any unintended consequences of the NVES.

In 2023, Australian EV sales reached a record high of 87,217 vehicles, accounting for approximately eight percent of all new vehicle sales. However, EVs were still outsold by hybrids, diesel-powered vehicles, and petrol-engined models.

• The AADA welcomed the Government’s funding for EV charging upgrades.
• An investigation found that the actual cost of upgrades will be higher than anticipated.
• Dealers may pass the costs onto customers.
• Dealerships play a crucial role in educating customers about EVs.
• The AADA has been critical of the Federal Government’s New Vehicle Efficiency Standard.

As Australia prepares for the transition to electric vehicles, the cost of necessary upgrades to car dealerships is a concern. The AADA warns that these costs are likely to be passed onto customers, as carmakers may not cover the entire bill. Despite the surge in EV sales, hybrids and traditional fuel-powered vehicles still dominate the market. The AADA remains critical of the Federal Government’s New Vehicle Efficiency Standard, but is committed to collaborating to address key issues affecting dealerships.