All dealerships need to prepare for the coming influx of electric vehicles (EVs) in the next 10 years or risk losing significant service-driven profitability. Why? Because EVs have far fewer moving parts and require less servicing. According to myEV.com, EVs eliminate more than two dozen mechanical components that would typically require periodic service, including tune-ups, oil changes, cooling system flushes, transmission servicing, and replacing the air filter, spark plugs and drive belts. McKinsey & Company estimates dollars per repair order will plunge 40% to 50%. Dealerships must now pivot their business practices or be left struggling to retain their current level of profits.

Without repair orders related to servicing these components, dealerships will need to identify ways to keep revenue streams strong. They will need to do a better job leveraging data to help deliver a steady cadence of service and maintenance opportunities to both internal combustion engine (ICE) vehicles and EV customers.

Data’s role in customer retention will be even more essential. With the proper tools, every dealership can take advantage of improving its current retention practices and leverage its data to create more profitable opportunities. This alone will allow dealerships to remain competitive, stay relevant and provide excellent customer service.

Recognizing dealer needs, current technology providers tend to only offer new and often disjointed, bolt-on technologies to existing dealer management systems (DMS). Not only do they come with a cost, but accessing data with these providers, require that you pay a fee or risk losing out on valuable sales and service data insight.

Bolt-on tech creates another challenge — ineffective integration — when data doesn’t truly integrate and flow to each end of the platform. One solution, Tekion’s Automotive Retail Cloud, was built from the ground up to tackle the challenges of integration and the continuing emergence of EVs all at once. And unlike other DMS providers, Tekionlets dealerships have control of its fully integrated, cross-functional data as part of the core platform.

Below are five ways dealerships can leverage technology and data in order to be well positioned to cushion the impact of potential reduced service profitability caused by the EV wave:

1. Reduce costs and operational hurdles. Automation and integration are key. Consider technology that simplifies your dealership processes, seamlessly integrates data across all functions and reduces the complexity of bolt-on, third-party technologies.

2. Take advantage of real-time OEM APIs. Many DMS providers don’t see partnering with OEMs as an opportunity to bring innovation to the automotive ecosystem and enhance systems and data integration. Look for providers who tout continual improvement and are proactively working with OEMs to improve consumer and user experiences through real-time data integration. 

Tekion’s platform uses APIs to integrate directly with OEM telematics data, so dealerships can proactively communicate recalls, real-time vehicle errors, or promote appointments when customers have reached an OEM-recommended service period. Not only do these APIs allow dealers to schedule more service, it allows technicians to be prepared and fully informed of specific maintenance needs prior to the customer’s arrival, allowing for better time management in the service department.

3. Use AI and machine learning to upsell. Your data should connect through AI and machine learning to automate communications and sell for you — without creating additional manual data entry work. 

4. Stop paying for your data. A dealership’s data is its most potent weapon, and many DMS systems are taking advantage of dealerships by withholding data or charging extra for it. The right technology partner will make your data accessible and actionable. It will also seamlessly integrate throughout all business functions — without the compounding bolt-on costs.

5. Use the right technology. It may be time to consider switching to a technology partner that works for you and is actively finding ways to simplify and streamline your business. Tekion Automotive Retail Cloud is built from the ground up as an end-to-end, fully integrated dealership platform to support your service lane’s profitability and to help dealerships prepare for the coming EV wave.

Johannes Moeschl is Director of Partner Integrations at Tekion.