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Electric cars cut deep into Spanish dealerships’ repair profits

Electric cars cut deep into Spanish dealerships’ repair profits RUSSPAIN.com © russpain.com
Electric cars cut deep into Spanish dealerships’ repair profits © russpain.com
Spanish dealerships are losing their basic source of workshop profit as electric cars require far less maintenance. Independent garages are stepping up, forcing the industry to rethink a business model that has lasted for decades.

Spanish dealerships face shrinking repair profits as electric cars reduce routine workshop work. For years, oil changes and timing-belt jobs kept workshops busy, while warranty repairs helped pay the bills; selling new cars was never the real moneymaker. Now electric cars have wiped out much of that routine work, straining the old business model. Reports from Deloitte and McKinsey show that electric vehicles need far less maintenance, prompting dealerships to look for new revenue from vehicle sales and digital services.

Norway shows what comes next. Electric cars account for 96% of new registrations there, and workshops have lost up to half their service hours. Post-sale revenue has fallen 35%. Volkswagen’s importer says electric models bring in 46% less per visit than combustion cars. The UK and Germany are seeing the same pattern. Auto Trader data shows a typical dealership selling 500 cars a year is losing hundreds of thousands of pounds in service income. In Italy, customers save between 42% and 75% on maintenance with an electric car. Deloitte and McKinsey reports put the drop in workshop revenue over an electric car’s life at 40% to 60%. Aftersales accounts for just 40% to 50% of a dealership’s turnover, yet can deliver up to 80% of its operating profit.

Dealerships are fighting back. Some have raised hourly rates, charging top prices for simple jobs such as changing wiper blades or cabin filters. Others bundle basic checks into “electric car maintenance” packages, putting simple inspections behind steep flat fees. Toyota and KIA, along with Mazda, are trying loyalty programs such as “Toyota Relax” to keep customers coming back. Rather than simply raising prices, they offer extra warranty perks and scheduled checks. Toyota Europe says the programs aim to retain customers with added warranty and inspection incentives.

Electric cars need less work. Oil changes disappear, as do spark plugs; fuel filters and dual-clutch gearboxes are also out of the picture. Still, “zero maintenance” is a myth. Electric cars are heavier, putting more strain on the chassis and steering, especially on rough roads. Because regenerative systems reduce brake use, brakes can seize or rust if they are not cleaned now and then. Even single-speed reducers need an oil change at about 100,000 kilometers. Manufacturers often gloss over these needs in official schedules as they promote the “zero maintenance” idea. McKinsey reports note that as more people buy electric cars, aftersales is shifting from routine maintenance toward software and diagnostics, along with tougher repairs.

The gap between what carmakers promise and what electric cars really need gives independent garages an opening. In Spain, Real Decreto 281/2021 sets up a special training course for hybrid and electric vehicle maintenance. It includes a 45-hour high-voltage safety module open to any certified technician. Private certificates such as TÜV SÜD are now required for authorized end-of-life vehicle centers under RD 265/2021. Safely disconnecting high-voltage systems and replacing battery parts costs much less than replacing a whole battery pack, which remains standard at many official service centers.

Even before electric cars took off, aftersales was the real lifeline for Spanish dealerships. Faconauto says aftersales accounts for just 16% of a dealership’s turnover in Spain but brings in nearly half its profit, with margins four to five times higher than car sales. The business model now under threat in Norway is the same one keeping much of Spain’s dealer network alive. As electric cars spread, the basic question is how quickly the impact will be felt.

Independent workshops are already adapting. More are repairing batteries instead of simply swapping them out. The shift extends beyond Spain. As reported earlier, Chinese brands such as BYD and MG, along with Chery, are adding pressure. Their cheaper electric cars challenge sales and service strategies alike.

For drivers, the savings are real and immediate. For dealerships, the electric shift threatens their core business. Official networks need to prove their value to customers quickly. Otherwise, they risk losing the workshop goldmine to nimble independent garages equipped for electric cars.

Frank Miller RUSSPAIN.com
Editor

Frank Miller

Frank Miller covers the automotive industry, transport and Spanish road regulation for RUSSPAIN.COM