Electric Cars and Service Income
Was riding in a very nice i3 the other day - all electric awesome car, very torquey, fast, drives just lika a BMW should, but still too short electric range especially compared to a Tesla.
The conversation with my Pal in the drivers seat who is working on the bleeding edge of electric vehicles, came around to how once electric starts to really take hold, this is going to be a HUGE disruptor to car dealerships. Service revenue with electric vehicles is going to plumment as more consumers go electric. So many fewer moving parts - no oil changes, fuel pumps, spark plugs, alternators etc etc . Brakes last 150,000 K - batteries are getting better and better and recycling is advancing.
I think this ACQ will be an ok trade here for some years yet, but in the long term, when we start to see 200 mile electric cars in the $35,000 range and every home is buying one, service department margins for dealers are going to be dropping fast.
According to my buddy, the last people fighting and kicking all the way into the inevitable electric car phase, are going to be the car dealers.