Don't Take Yourself Out Of The EV Game Before It Begins

Don’t Take Yourself Out Of The EV Game Before It Begins

Like it or not, electric vehicles are here and more are coming.

I have been reading a lot of online forums and groups lately. One of the recurring post subjects is shop operators complaining that electric vehicles do not need maintenance or repairs. Some think these electric vehicles will put shops out of business. Some even feel that they should get out of the business now.

Like it or not, electric vehicles are here and more are coming.

This is ridiculous. If the internet was around in the late 1970s, shop owners and technicians would have been complaining that fuel injection and solid-state ignition was going to destroy their carburetor rebuilding and points replacement business. Somehow shops survived and even managed to thrive after these opportunities dried up.

Like it or not, electric vehicles are here and more are coming. Yes, they will undoubtedly change what happens in the bays. But, they are not going to change the relationship between the shop and its customers. People will still be driving, cars will still break down and customers will still demand to have them fixed by 5 pm. 

There are still opportunities for maintenance, you just have to frame it in terms Tesla and other electric vehicle owners understand. Instead of an alignment, it is a Suspension Geometry Battery Range Optimization Procedure. A coolant flush is now a Thermal Transfer Fluid Renewal for Battery Temperature Regulation. Parking brake adjustments are now a Brake Drag Reduction Procedure for Range Extension.

The good news is that Teslas have to use the same terrible roads as every internal combustion vehicle. Better yet, their autopilot systems can’t dodge potholes. There are many opportunities for components like wheel bearings, struts and bushings that will need replacement as often as their conventional counterparts.

I know there will continue to be opportunities for shops for older or second-hand electric vehicles as well. For example, all of these vehicles have a 12-volt AGM “cranking” battery to power lighting, the ABS system and other systems that require 12-volts. In addition, electric vehicle A/C systems use refrigerants like R-134a and now R-1234yf.

Some shop owners and technicians are talking about quitting the game before it really gets started. So what if you can’t sell an oil change to an electric car owner? There are still plenty of other opportunities that can’t be ignored.

You May Also Like

Shop Equipment ROI – Tooled for Profit

Understanding how to calculate ROI can help your purchasing decisions.

I’m not a financial scholar by any means, but I know what return on investment (ROI) is. It’s a mathematical formula that yields a representation of the profitability of any type of investment. In the automotive repair industry, we primarily associate this with equipment. Admittedly, I’ve never used the term much, more often approaching things from the standpoint, “Am I making money with this or not?” As technicians and shops, our typical thought process centers on each individual job, how much time and money we have into it, so we’re used to thinking profit or loss, and also pretty good at knowing if we made money, or if we lost our “back quarters.”But over time I’ve learned that the thought process alone is not always the best approach, and making money doesn’t necessarily mean a good ROI. Even if you don’t go crazy with an exponentially long, complicated equation, if you understand the basic idea and process of calculating ROI, it can help you make good purchasing decisions. The base calculation would be dividing your net profits by the cost of the equipment. That’s your ROI. Then, if you want to take it further, you can divide that number to get a time-based ROI average.Let’s look at a basic calculation. You buy something for $10, then sell it for $14. Your profit is $4. Divide profit by investment, ($4/$10) and you get an ROI of 40%. Not bad, but if it took two years to make this profit, then your ROI would be 20% annualized, which is not as impressive. You can use this basic formula to compare products you sell as well, and it may help you decide what’s best to keep in stock or not.Now let’s try something with equipment. You have an old tire machine that’s paid for. You average one set of tires per week and it takes 1.5 hours to complete the job. You decide to buy a new tire machine that is much quicker and more efficient but it cost you $20,000. Now the same job only takes one hour. Based on the cost of technician salary, you calculate that it saves you $30 per job with this new equipment. In this case you would use the formula: savings (additional profit)/investment. At one set of tires per week, that works out to $1,560 per year. $1,560/$20,000 equals an ROI of approximately 8%. That’s not too good. It will take you almost 12 years to pay off the new machine.On the other hand, if you average five sets of tires per week, then your additional profit for the first year is $7,800. $7,800/$20,000 equals an ROI of 39%. That’s pretty good. A general rule of thumb is to pay off any piece of equipment within two to three years. This puts you right on track.But now, here is the problem. This is where we throw the proverbial wrench into the plans. Equipment is tricky. You should also calculate in installation and maintenance costs, as well as the cost of training for the new equipment, and factor in how long the equipment is going to be relevant. This is an especially important factor when considering a scan tool, the required updates and how long before it’s potentially obsolete. In the case of a tire machine, you can also calculate in savings from other benefits of a new machine, such as no more damage to wheels or tire pressure monitoring system (TPMS) sensors, which the new machine can eliminate.Some of this can be overwhelming, and it makes me realize why it’s easier just to fly by the seat of your pants and wonder, “Am I making money or not?” It’s an important business aspect, however, to know what is behind the idea because it can benefit you in so many ways. Even without math, you can almost visualize the numbers in your head.I’ll try it by leaving the formulas out to decide whether it makes sense to buy a dedicated TPMS tool when you already have a full-function scan tool with TPMS ability.If you get a TPMS problem every day and you use your full-function scan tool to diagnose it, most likely it takes much longer to boot and longer to navigate to the function. Even then, it may not cover all you need. Because there’s such a vast amount of information that a full-function scan tool has, it simply takes more for the manufacturer to keep everything current. Plus, you often must still rely on service information for certain procedures and then, if it’s the only scan tool for your shop, it ties it up for use in other diagnostics.Now, let’s compare that to a dedicated TPMS tool. Built with only one function in mind, they can make the process much quicker, have greater coverage, boot quicker and quickly walk you through all steps of any required TPMS resets. When you factor in the savings in time and the fact that your primary scan tool isn’t tied up, you can prove the value of a dedicated TPMS tool through ROI calculations. On the other hand, if you rarely work on TPMS systems, you can prove it wouldn’t make sense at all, since you do have the function on your primary scan tool.While you haven’t done any calculations, you’ve thought of it in that manner and can picture where the calculations might end up. If you’re on the fence, the math will give you the answer. Ultimately, your accountant could take the idea even further, with an undoubtedly more advanced knowledge of ROI, and almost certainly a way to calculate depreciation into the formula. That’s where I sign off, but you get the idea. It’s a great concept that represents fundamental business financials.

Read November’s Digital Edition of ShopOwner

Every issue of ShopOwner includes valuable business management and technical editorial content.

Read Shop Owner’s October Digital Edition Now

Every issue of ShopOwner includes valuable business management and technical editorial content.

Grand Touring Tire Market Adapts To Changing Demands

The days of grand touring tires being fitted only to sedans are a thing of the past.

Catalytic Converter Replacement Rules

Converters must be certified and labeled with the correct codes that are stamped into the shell.

Other Posts

Karma Automotive Launches All-Electric Sedan

Distinctive styling, with unique chassis and drivetrain setup, add prestige.

How Important is Regenerative Braking For EVs?

Regenerative braking helps to increase the range of an EV by up to 20%.

EV News Pros And Cons – Understanding Biases

Cold weather range loss and EVs: Separating fact from fiction

Charging an electric car in winter time
Toyota Releases New Hydrogen-Powered Mirai

New fuel cell electric vehicle to include $15,000 of complimentary hydrogen.