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EV & Mobility

Auto dealers struggle to make EV economics work despite rising sales

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Auto dealers struggle to make EV economics work despite rising sales

While EV sales are gaining momentum, industry body FADA says dealers are struggling with low margins, rising operating expenses and higher infrastructure investments, exposing a profitability challenge that could become more pronounced as adoption expands.

These investments are adding to operating expenses even as EV workshops generate lower revenue than those servicing ICE vehicles, he said. (Disclaimer- The image is AI generated.)

Auto dealers in India are facing low margins on electric vehicles (EVs), even as EV sales continue to grow. In October, EVs reported an 11.5 per cent penetration, with 3.55 lakh units, as demand outpaced supply amid increased fuel prices, enhanced range, and near-ICE pricing, data from the Federation of Automobile Dealers Associations (FADA) showed. “India is one market wherein we get the lowest margins as far as electric vehicles are concerned,” Sai Giridhar, President, FADA, told ETAuto. Advt

The shift towards electric mobility is requiring dealerships to upgrade infrastructure, set up specialised workshops and invest in tools and trained technicians. These investments are adding to operating expenses even as EV workshops generate lower revenue than those servicing internal combustion engine (ICE) vehicles, he said. Dealers have also expanded their presence into Tier 3 and Tier 4 markets, adding to their short-term cost pressures. However, these costs are required to build the network and provide buyers with consistent sales and after-sales support as EV adoption expands. “Dealers should be adequately compensated,” Giridhar said.

The industry body advocates that dealer margins need to be competitive with global standards to support the investments required for the transition.


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