Dealers struggle to recoup EV investments as consumer demand lags
From Automotive News
A majority of dealers haven’t recouped their investments to service and sell electric vehicles, exposing a mismatch between automaker electrification timelines and consumer demand.
The data from Automotive News’ 2026 Dealer Outlook Survey reveals that more than half of dealers said they have recovered none of their investment. Just 3.6 percent said they’ve regained all of it.
Automakers and the federal government under former President Joe Biden pushed
dealers to invest in
EV sales infrastructure, Don Hall, CEO of the Virginia Automobile Dealers Association, told Automotive News.
But with that external pressure to electrify and investment from the dealers, it “doesn’t mean that the customers are going to buy those vehicles,”
Hall said. This difference between electrification goals and consumer demand puts financial strains on dealers struggling to sell and service EVs.
Automakers pushed Donalson Auto Group, of Silsbee, Texas, to invest in EV infrastructure, said Daren Granger, vice president of the group. It was a choice between becoming an EV dealer or accepting limits on EV allocations, he said. His group, which has four stores selling Cadillac, Chevrolet, GMC, Chrysler, Dodge, Jeep, Ram and Toyota vehicles, has sold and services only a few EVs because of a lack of interest in the area.
“We’re probably in the hole about $450,000 to $500,000 right now on the EV side,” Granger said.
Buyers don’t consider EVs, concerned about infrastructure, dealers say
Most dealers have found their customers aren’t considering EVs, the survey found. The survey was conducted from Dec. 4-Jan. 9 and received responses from 140 dealership owners, principals, controllers, CFOs, executives and general managers, the vast majority from the U.S.
The number of dealers who said that customers are not interested in purchasing EVs
increased 8 percentage points from 2025 to 73 percent in 2026. Fewer than 10 percent of dealers in the 2026 results said that customers are interested and buying.
This pattern suggests an adoption chasm: Early adopters have already purchased, but the mass market remains unconvinced, said Brian Maas, president of the California New Car Dealers Association. The key to reaching the next level of customers required to expand the market is improving the
charging infrastructure.
“To really advance sales ... we’re going to need to tackle the infrastructure challenges,” Maas said.
A majority of condo owners and apartment renters said they would be more likely to buy or lease an EV if their building offered overnight Level 2 chargers, according to a
report by EVs for All America, a nonprofit dedicated to expanding EV access. But more than 75 percent of owners and renters said they don’t have chargers in their buildings.
These consumers need improved access to chargers in multifamily housing, Maas said.
The infrastructure gap demonstrates that electrification requires more than dealer investment, automaker development and pressure from the government, Hall said. Governments at the state or federal level must invest in public charging infrastructure if they want the market to expand.
For ‘average folks,’ EVs aren’t affordable
Affordability is another reason demand for EVs is falling, a hurdle made higher by the expiration of the $7,500 federal EV tax credits on Sept. 30. The end of the incentives added an
affordability strain to already pricey EVs and left dealers without a key selling point.
“Average folks are trying to find cheaper alternatives in terms of upfront costs,” Maas said. “For most consumers, EVs aren’t that vehicle.”
Ninety-two percent of dealers surveyed by Automotive News said they expect the end of the tax credits to have a negative or extremely negative effect on EV demand, and 8 percent said there would be no difference.
Even in areas where electrification is popular such as in New England, sales have declined, but there is still interest in these vehicles, said Jeb Balise, CEO of Balise Motor Sales Co., a dealership group with locations in Massachusetts, Rhode Island and Connecticut.
“You have ebbs and flows, but we have a lot of repeat customers that are buying their second or third EV,” Balise said. Maas also said that, while sales have taken a hit, dealers still sell EVs.
Balise Motor Sales, of Springfield, Mass., ranks No. 77 on Automotive News’ 2025 list of the
top 150 dealership groups, retailing 15,183 new vehicles in 2024.
What EVs need is more time, so they can develop into the type of vehicle that fits consumer affordability and range needs, Granger said.
The issue with EVs was never a matter of interest, but implementation, Balise said.
“I don’t think anything could ramp up as fast as what the hope was from manufacturers or the government,” he said. “It isn’t practical.”