The latest report about car sales in California brought up very interesting data about all-electric vehicle sales by franchised dealerships and direct sellers.
Direct sales of electric vehicles (by the manufacturer) were often pictured as the future of the automotive industry, compared to sales by franchised dealerships.
However, according to the California New Car Dealers Association (CNCDA)‘s report for Q1 2023 based on Experian Automotive‘s numbers, BEV sales by dealers expand quicker than by direct sellers and gain market share in the segment.
In the first quarter of 2023, nearly one-third of all new BEVs registered in California were sold by dealers, compared to less than one-fifth in Q1 2022. The volume increased by 140 percent year-over-year.
- Franchised Dealerships: 32.9% share vs. 19.0% a year ago
registrations increased by 140% year-over-year
- Direct Sellers: 67.1% share vs. 81.0% a year ago
registrations increased by 15% year-over-year
The association of dealers even attached a graph that shows a huge difference in growth.
“Franchised dealership share of the state’s new retail BEV market increased from 19.0 percent in 1Q‘22 to 32.9 percent this year. Data sourced from Experian Automotive.”
It actually indicates that franchised dealerships are fighting back their market share in the BEV segment, which mostly because of Tesla (later joined by Rivian, Lucid, and Polestar), was dominated by direct sales.
The report shows that Tesla increased its registrations by 10.6% year-over-year to 53,141. Lucid and Rivian are currently minor players, so that would explain the much slower growth rate. Dealers are also increasing their sales from a lower base so it’s easier to achieve a higher growth rate.
As more and more established brands are now selling all-electric cars, dealers are getting on board with BEVs (maybe to get back lost profits). The funny thing is that they are showing that they are good at it, while in the past many pointed out dealers as the reason why BEVs are not selling.
Well, we are not here to judge which business model is better, but just to point out that things are changing.