Nissan primes the EV pump

Marketing

With its new Ariya electric crossover cruising toward American shores, Nissan Motor Co. has unveiled a program to smoothen EV adoption and prime the sales pump.

EV Carefree+ will offer Ariya buyers a battery warranty and a year of complimentary access to the EVgo public fast-charging network. Also included: 3 years/36,000 miles of scheduledmaintenance, which covers tire rotations and air filter and fluid replacements.

The service freebie could give EV customers more confidence and help address a major dealer pain point.

Low-maintenance electric vehicles are a drag on the dealership’s profit engine — the fixed ops department.

In past years, service revenues from Nissan’s electric Leaf hatchback have been half that of the brand’s combustion engine vehicles, said Nissan National Dealer Advisory Board Chairman Tyler Slade.

The negative effect of EVs on dealer fixed ops business will be compounded over the next few years as Nissan prepares to introduce several high-volume electric sedans and crossovers. By 2030, the Japanese automaker expects EVs to account for 40 percent of its U.S. sales.

“The EV business is a significant concern for the franchised dealer’s service and parts business going forward,” Slade told Automotive News.

EV Carefree+ could soften the impact of EVs on retailers’ bottom line by boosting customer retention rates and creating new revenue-making opportunities.

Aditya Jairaj, Nissan North America senior director of EV strategy and transformation, said the complimentary service will reassure owners their EV is well maintained while creating “customer touch points” for dealers.

It keeps the customer in the dealer franchise system and improves satisfaction and loyalty rates, Jairaj said.

While battery-powered vehicles might require less service than combustion engine vehicles, EV owners are more likely to stick to manufacturer-recommended maintenance schedules, a CDK Global study showed.

“There’s a little bit of concern [because] it’s a new technology,” Peter Kahn, CDK Global senior director of research and insights, said during a Fixed Ops Journal Forum session in October. EV owners “want to make sure that everything is in tip-top shape when it comes to the powerplant itself.”

EV Carefree+ also aims to generate business opportunities beyond the service drive for Nissan’s 1,078 U.S. dealers.

Slade said service department customers are 30 percent more likely to buy another car from the dealership.

“When they come in for maintenance, it creates an opportunity to show new models and technologies and trade them out of their current EV into a newer, nicer EV,” he said.

Nissan dealers are hopeful EV Carefree+ will drive long-term service business. While EVs have fewer components susceptible to breakage, when their high voltage batteries and complex e-motors need fixing, the repairs can be more complicated — and profitable — for the service department.

“If a larger repair is needed, the EV customer is comfortable having it done at the dealership because they’re familiar with the people, the process and the amenities,” said Slade, operating partner at Tim Dahle Nissan Southtowne in suburban Salt Lake City.

While complimentary maintenance is a typical perk on luxury marques, it is rarer on mass-market vehicles. But bundling the service “is a potential issue” for Nissan dealerships that sell prepaid maintenance packages, Slade said.

“Now that it’s free, we lose that revenue,” he said.

Carefree+, also available on the 2023 Leaf hatchback, “offers EV ownership with peace of mind standard,” Jairaj said.

“As we look at reject reasons for EVs with mainstream customers, we identified the top categories,” he said.

To address range anxiety, Nissan offers a year of complimentary charging on the EVgo public charging network for Ariya customers. Leaf customers receive a $100 charging credit with EVgo.

Roadside assistance covers out-of-charge towing to the nearest Nissan dealership, charging location or the owner’s residence.

“ ’What happens if I run out of charge?’ is a concern,” Jairaj said. “For three years, if you run out of charge, someone will come and get you.”

Meanwhile, an 8-year/100,000-mile battery warranty and periodic inspections give buyers confidence in the relatively new powertrain.

Some consumers are skeptical about EV battery longevity, Jairaj said.

“The multipoint inspection will assess battery health and how the different technology elements are doing,” he said. “Our intention is to alleviate customer stress.”

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