How EVs could affect your labour rate

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Think about the amount of labour that goes into working on an internal combustion engine. If you’re not already capturing the value of that labour in your current labour rate, you may be in for some hurt when electric vehicles start showing up at your door, suggested a shop coach.

If your shop is relying on parts sales too much when it comes to the bottom line, what will you do when EVs start making up more of your business, Bill Haas, president and Owner of Haas Performance Consulting asked during the seminar Shop Production and Payroll Drives Profits at the Midwest Auto Care Alliance Vision Hi-Tech Training and Expo.

Because EVs have far fewer parts than an ICE vehicle, where will your profits come from?

“I want you to think about this: What do you think happens to our industry when we start to work on electric vehicles? It’s going to change,” Haas observed. “How many parts do you think you’re going to sell on an electric car.”

Brake sales will be slashed. There will be services related to brakes, but replacements won’t be like the industry is used to. The routine oil and filter appointments are gone. There are no spark plugs or ignition coils. “The list goes on and on and on,” Haas said.

Parts like ball joints, tie rod ends, control arms and hoses will be in demand. And, of course, tires.

“The problem is this: What you need to start thinking about, what you’ve got to be prepared for is this is going to be a huge change to the industry,” Haas said. “And you’re going to sell less parts, which means what? You have to sell more labour. And you have to be smart enough to make sure that you’re not just getting paid for what you do. You better get paid for what you know. Because knowing enough to be smart enough to do well in repairing an electric car is going to be a big deal.”

You also need to think about the equipment in your shop. Because an EV is heavier than an ICE, look at your lift equipment, Haas pointed out.

“Plus the lift points are very different. So you have to be able to have arms that are going to get in to get the lift points,” he added.

One mistake could be financially costly. If the vehicle is lifted in the wrong spot and dents a piece of steel that damages the battery or the airflow around the battery, the vehicle is compromised.

“This is all the stuff that we’re up against, to be prepared [for] to be successful in our businesses,” Haas said.

He tied it all back to ensuring your labour rate is where it needs to be because you need to have the money available to make the tools and equipment investments, to send your techs to get the training and to market to your customers that you’re the best choice when it comes to getting their EV serviced and repaired.

“So you need that net profit,” he emphasized.