Why transitioning to EVs is a money maker for garages

If you want to make serious money, grab as bigger slice of the EV repair market as you can advise industry experts – before your competitors beat you to it. A combination of lowing inflation, more favourable EV parts prices and a significant void in the trade means the time is ripe to become switched on to electric vehicles, so says LKQ Euro Car Parts and Factor Sales.

“If I was a garage owner right now I’d be thinking about trying to move out of the older competitive ICE world where people are quoting £10 difference on a repair into something where you’re competing with a dealer who’s charging much more… and make a lot more money than you do on today’s ICE cars”, LKQ head Kevan Wooden previously told CAT.

One of main keys to profitability lies in the little known fact that recent data and analysis, gathered from transactional data from participating motor factors, indicate ICE-only parts are suffering from a higher inflation rate compared to their EV+ICE counterparts.

In fact, EV+ICE (a combination of pure electric and hybrids-ed) components are now priced consistently lower than the overall market, according to Factor Sales – a leading market measurement data provider on the UK automotive aftermarket size, revenue and price trends across a catalogue of thousands of motor parts. “This marks a significant shift in market dynamics that has persisted for over 12 months” Business Development Manager Alex Jenner told CAT.

A varied selection of examples provided by Factor Sales working on average inflation rates over the past two years, show rises for certain ICE only hard parts have been double that for compatible EV+ICE components although the findings can’t be called conclusive.

Note the terminology: Factor Sales says the reason that it specifies its special EV+ICE category in the analysis is because “there is obviously a huge disparity in the quantity of data between EV only and ICE vehicles within the aftermarket at present, this would therefore not give as true a representation”.

LKQ’s Wooden admits that new found, long term profitability comes at a price, especially when obtaining the right training and purchasing the right specialist equipment but the numbers certainly add up, he claims. Whereas today some garages are able to work on as much as 50 different brands, those wanting to move into electric will need to focus only “on about two or three”.

“I think those who want to invest in EV and get that equipment on board and learn from it will have the opportunity to make a lot of money,” continues Wooden and Factor Sales endorses his views. “For EV owners, this discrepancy in inflation rates brings promising news. The consistent lower inflation rates in EV+ICE parts suggest a growing acceptance and adaptation to EVs within the aftermarket”.

As more EVs enter the independent aftermarket, Jenner believes “manufacturers and suppliers are adapting their offerings to cater to this evolving consumer base, leading to increased competition within the sector”.

Kevan Wooden

One of the biggest repairs fears with EVs is the cost of battery repairs let alone their replacement. Yet even here Wooden strikes a positive note by suggesting that actually this is one of best areas to make serious money. He points out that independents can savagely undercut main dealer quotes – of up to £20,000 – as the existing battery pack may prove perfectly healthy and simply “just need to be opened safely to replace a module to give the pack considerably more life”.

“Safely” is the key word though, stresses Wooden, as proper training on handling such dangerous components is critical. “Training is key” he adds and this is a key area where his company has already invested in heavily, such as in LKQ’s dedicated Academy.

Training however is poor relation according to a recent missive from the Independent Garage Association which says while the number of EVs on UK’s roads is rapidly increasing, analysis shows the number of skilled technicians that can service them is not keeping pace with the growth. The cross-party think-tank Social Market Foundation (SMF) estimates that by 2027 there will not be enough qualified mechanics to maintain all of Britain’s EVs. By 2030, the country could face a shortfall of 25,000 qualified technicians.

The report goes on to recommend that an attractive green careers campaign to entice young people and those from underrepresented backgrounds into EV repairs is instigated. It also suggests developing a creditable plan to upskill technicians to cater for an upsurge of EVs on our roads which already has surpassed one million.

Wooden denies he’s not pushing the Academy simply for financial gain but instead secure the future of the aftermarket. “We are all working towards the same goal; everybody’s got to win in this.” And the good news is that despite such an seismic shift in working practices, time is still on the independent’s side.

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