As the global transition to battery electric vehicles (BEVs) accelerates, the automotive industry is at a critical inflection point. While sales growth of BEVs has slowed slightly in recent years, they are still projected to comprise around 50% of new-vehicle sales by 2035.  

Theoretically, BEVs are expected to drive lower aftermarket maintenance and service needs — as real-world data on maintenance and repair needs from a large number of BEV owners begins to emerge, we are now able to test those theories in practice and provide valuable insights for aftermarket service providers, investors and consumers.

A recent L.E.K. Consulting study highlights a number of significant findings from BEV owners regarding their service and repair experiences. Contrary to expectations of lower spend, the data shows a more complex reality of BEV ownership. BEVs, while reducing the frequency of routine maintenance visits, have shown higher instances of unexpected failures and often higher overall maintenance and service needs. These findings present both challenges and opportunities for the aftermarket service industry. 

BEV adoption and market forecasts

Despite recent revisions in BEV sales expectations, the transition to BEVs continues to march on and they are projected to comprise up to 25% of U.S. vehicles in operation by 2035. This growing share will have a material long-term impact on the automotive aftermarket, especially in terms of service demand if the theoretical reduction in maintenance needs for BEVs is realized.

Higher early ownership costs for BEVs

Although BEVs are expected to require fewer scheduled visits than internal combustion engine (ICE) vehicles, the reduction in scheduled maintenance — estimated to be 25%-40% lower over a vehicle’s first 150,000 miles — does not fully compensate for a higher incidence of unexpected repairs.  

While L.E.K.’s study reveals that BEV owners report 10%-15% fewer routine maintenance visits compared to ICE and hybrid vehicle owners, they were also significantly more likely to experience unexpected repairs. Unsurprisingly, tire and wheel repair are most prominent — 49% of BEV owners reporting unexpected maintenance cite tire and wheel repair — but are followed by maintenance for a range of components, including battery management, electrical systems, brake systems and thermal management. These unexpected failures can increase costs significantly relative to a similar ICE vehicle, especially within the first three years of ownership.

Interestingly, while BEVs are promoted for their lower long-term maintenance costs, real-world data suggests that, early in the vehicle life cycle, BEVs may incur up to 40% more in repair and maintenance costs compared to ICE vehicles, aligning with anecdotal reports of BEV fleet owners experiencing higher than expected costs.

Collision repair costs remain high

Separate from mechanical and electrical maintenance and repair, collision repair costs for BEVs have historically been approximately 50% higher than those for ICE vehicles. These higher repair costs have been partly driven by reliance on higher-cost original equipment manufacturer parts and the increased complexity of handling BEVs. While the relative costs have begun to converge, higher labor costs are expected to persist. 
 

Implications for the aftermarket service industry

The evolving needs of BEV owners have significant implications for service providers across the automotive industry. Traditional models, which may rely heavily on high-volume routine mechanical services such as oil changes, will need to be reimagined, requiring investment in tools, training and capabilities to address common BEV fail points. Additionally, the shift toward more complex software-driven systems in BEVs opens up new opportunities for services such as sensor calibration, battery health monitoring and software optimization.

Moreover, the reduction in routine services such as oil changes, a mainstay for upselling additional services in ICE vehicles, will require service providers to develop new ways of driving customer loyalty and visits. Increasing the expectation and perceived “need” for new maintenance activities will be a key lever to continue capturing value and bridging the revenue gap caused by the decrease in traditional mechanical repairs. 
 

Key takeaways for service providers

  1. BEVs are not maintenance-free: Despite requiring fewer routine services, BEVs will still require significant aftermarket support, particularly in managing unexpected failures.
  2. A shift in service focus: Routine mechanical maintenance is significantly reduced for BEVs, but services such as sensor calibration, software updates and more in-depth HVAC and electrical system services are likely to become critical.
  3. Collision repair opportunities: BEVs will continue to present higher repair costs due to the complexity of electrical systems, providing a durable revenue stream for shops that invest in the necessary skills and equipment.
  4. Early failures and increasing role of dealerships: Higher rates of unexpected part failures within the first few years of ownership may lead to more repairs being conducted by dealerships, increasing the importance of establishing relationships with dealership service departments.

Conclusion

The shift to BEVs is creating both disruption and opportunity within the aftermarket service industry. While BEVs will reduce demand for some traditional services, new opportunities are emerging for those that can adapt to the unique needs of BEV owners. As BEV adoption grows, service providers that invest in the right tools, capabilities and training to service these vehicles will be well positioned to thrive in the evolving automotive landscape.

To learn more, please download our analysis. 

L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and brands mentioned in this document are properties of their respective owners. © 2024 L.E.K. Consulting LLC

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