by Chasidy Rae Sisk
Although experts predict that the increase in safety features will reduce accident frequency, repair complexity is apt to lead to increasing severity – and repairers can expect these trends to magnify as electric vehicles (EVs) become more prevalent.
Collision repairers have been bracing for the “Technical Tsunami” for nearly a decade as a dwindling number of shops are inundated with constantly advancing vehicles while simultaneously struggling to process unprecedented high volumes of repair with a limited staff. Although experts predict that the increase in safety features will reduce accident frequency, repair complexity is apt to lead to increasing severity – and repairers can expect these trends to magnify as electric vehicles (EVs) become more prevalent.
How common are EVs? Reports indicate that the sale of new light-duty plug-in EVs and hybrids increased to 608,000 in 2021 – nearly double the 308,000 EVs sold in 2020! While this is in line with the Biden Administration’s goal of seeing EVs encompass half of all new car sales by 2030, the current infrastructure is not yet equipped to handle such an influx. To support that goal, the US needs at least one million fast-charging stations, but according to the US Department of Energy, there are currently fewer than 48,000 public charging stations and just over 6,000 fast-charging stations.
Late last year, Congress passed a $1 trillion infrastructure bill to combat these challenges, yet 2030 is less than eight years away, which raises several questions for auto body professionals:
Is it realistic to increase EV sales to become 50 percent of the new car market in such a short amount of time? How will the increase in EVs impact shops? And how can auto body repair facilities prepare for and adjust to the morphological changes in the industry’s landscape without being submerged? New Jersey Automotive solicited opinions from industry leaders on these queries and more.
Sean Carey, president of SCG Management Consultants LLC, believes “it’s futile to look as far out as 2030. For certain, the vast majority of new vehicle sales will be EV by 2030; however, I cannot begin to imagine what the industry will look like by then. The market, driven by technology, is moving at such a dramatic pace that it’s even difficult to predict where we will be by 2025. We’ve reached an economic tipping point, and the next three years will determine how many shops survive, what the ‘new’ non-DRP economics of the market will look like and how many shops cope with the space, equipment and manpower and skill requirement needs of an ever-evolving vehicle.”
Not everyone shares the same optimism about reaching such a high volume of EVs this decade.
“Increasing the number of EVs comes with many challenges, and 2030 is only eight years away,” observed Chuck Olsen, senior vice president of automotive technology solutions at AirPro Diagnostics. “My concerns with meeting that timeline are related to the grid, charging times and acquisition of the materials needed to manufacture batteries. A lot of technology is being developed to address those difficulties and speed up the timeline, such as the creation of solid state batteries which would hasten charging and allow for a longer range of miles traveled before needing to recharge.
“We also need to see multiple charges in the overall power grid that takes solar and wind power into account to meet those anticipated demands,” he continued. “Consider the rolling blackouts in California – with our current grid, what will happen if half a neighborhood tries to charge their EVs on a hot summer night? Because of all these unresolved issues, I suspect we’ll see delays until 2040 unless technology evolves drastically enough to effect some solutions to these obstacles.”
“The reports are not wrong, but these will be regulatory requirements, not goals,” clarified Wayne Weikel, senior director of state affairs at the Alliance for Automotive Innovation. “California, whose emission rules New Jersey has opted to follow, plans to adopt regulations to require that EVs comprise 68 percent of all vehicles sold in model year 2030, and the percentage would increase each year thereafter. Automakers are committed to electrification, but they cannot do it alone. This is a significant transformation which extends beyond simply making the vehicle. Convenient, publicly available EV charging infrastructure is needed everywhere consumers typically travel, and it will take both government and private investment to succeed.”
Fortunately, manufacturers are “heavily committed to our goals,” emphasized Mark Allen, manager of collision, equipment and EV after-sales service for Audi. “The industry – along with support industries like recycling, transportation and second life – are accelerating in evolution. The next five to 10 years will have many new silhouettes on the horizon.”
Most collision repair professionals have noticed the tidal wave of technology rushing at them, but “few have embraced it because it’s not easy,” Olsen said, reminding shops that “even if we build the infrastructure and reach 50 percent of new car sales being EVs by 2030, there will still be a significant number of traditional combustion-engine vehicles on the roads and in the shops, especially since we’re seeing an average vehicle age of 12 years right now.”
Still, the collision repair industry must accept that the crest of the EV wave is just around the corner and prepare accordingly, and as they brace for impact from the coming storm, pressure is building due to decreases in the number of shops around the country. While the Romans Group has indicated a compound annual decline of 0.5 percent for the past 15 years, IBISWorld’s recent statistical report reveals an average three percent decrease in the amount of shops since 2017. Research from the National Automobile Dealers Association (NADA) demonstrated a yearly decline in the percentage of dealerships operating on-site body shops since 2017, with a four percent decrease from 2020 to 2021.
With advancing complexity increasing the amount of time needed for EV repairs while fewer shops are available to tackle vehicle owners’ needs, these changes have created a conundrum that the average consumer has yet to consider – and that the industry needs to anticipate…What will the collision repair topography look like as we move into the future, and who will repair these vehicles in 2030?
“The demands placed on collision shops are great and will only increase,” Weikel suggested. “Through expanded use of technology, automakers continue to build an ever cleaner and safer automobile. We recognize that the workforce in the collision industry, and throughout the employment chain, must be prepared as these new technologies come to market. The only way shops can remain repair-ready to fix the cars of tomorrow is through investments in staff training and shop equipment.”
Allen agreed that shops need to get on the same wavelength as vehicle manufacturers if they hope to weather the technical tsunami, but he’s uncertain whether the bulk of shops are truly heeding the warnings being issued.
“I think the bigger and more philosophical question we should be asking is: How many shops are capable of doing these repairs, and how many of them should no longer be repairing modern vehicles? As of now, many shops are behind the curve on training, equipment, tooling and identifying materials and knowing when to repair or replace a component. A poll conducted a few years ago asked shops what type of equipment they had and what they were looking to purchase. Many didn’t have a frame machine, and those that did reported that their equipment was very old. Conversely, these same shops were looking to invest in scanning equipment. That demonstrates that there is a large gap of understanding to be filled before looking to deal with ADAS and EVs.”
Alluding to John Van Alstyne of I-CAR’s “rallying cry” related to the technical tsunami flooding the industry, Allen pointed out that “there has been little change in the way collision and related businesses conduct daily life. Sorry to generalize, but this is a very loud call to the industry as a whole…if you are serious about staying in business, this is the time to invest in training, equipment, staff and most importantly, yourself! Stop focusing on short-term profitability; success in the future requires a long-term commitment that will need to be carried out through time.”
Carey offered his input:
“The repairer community tends to be reactionary, waiting until it’s absolutely necessary before making structural changes. In the next three years, all shops will have to face the reality that, unless they make those changes, they simply will not be qualified to repair modern vehicles.”
For many independent shops, one of the biggest problems they encounter is the need to prepare for this influx of complicated repairs on a variety of vehicle brands.
“A Toyota dealership can expect to only work on vehicles manufactured by Toyota, but the independent collision repair industry is driven by insurers that expect shops to fix multiple vehicle brands,” Olsen noted. “That’s been our industry’s biggest challenge for a long time, and I expect that trend to continue unless we see a huge change in how insurance companies operate.
“The amount of general repairs and maintenance needed on EVs will be less because there are fewer moving parts, plus many procedures will be software-driven and even performed remotely,” he predicted. “However, EV repairs in collision will necessitate increased space requirements and specific safety training as well as investment in a multitude of different tools. As we get closer to a higher percentage of electrification, it’s possible that we’ll see shops embracing a more brand-specific approach to collision repairs.”
Keeping up with all of these changes on every make and model seems overwhelming, so it’s not surprising that industry experts view OEM certification as a life raft that can help shops safely reach the future’s shores.
“Many OE collision programs rely heavily on the independent repairer,” Allen stated. “Contrary to some claims that have been made, but in the collision space, we OEMs embrace the independents and partner with them to serve our customers. Certification programs are a great way to be involved with the brands you and your customers have in common. The true entrepreneurs will build their business plans to know their customers and the brands they serve – and become more specialized in those repairs.”
“It is critical for automakers to ensure their customers have access to shops capable of completing a quality repair, which is why OEM certified networks have grown in volume and stature,” Weikel agreed. “In these programs, independent repair shops typically outnumber dealer-based shops four-to-one, because automakers view independent repair shops as key partners in service to their shared customers.”
Olsen also believes that OEMs will play a larger role in the future, especially as it pertains to safety features.
“OEs need to partner with shops to ensure they have the correct training, equipment and testing to properly repair EVs and other advanced technology. The level of standardization between these vehicles from manufacturer to manufacturer will dictate whether it’s feasible for a collision repair center to work on all makes and models, but technicians will absolutely need to enhance their skill sets; we have to raise the bar.
“I-CAR is starting to address some of the industry’s needs by offering training on ADAS and EVs,” he added. “But if we’re going to fill our ranks with qualified technicians, we must first attract them to this trade by demonstrating automotive’s shift to a high-tech field.”
“There is one underlying aspect of repairing the vehicle of tomorrow that is not sufficiently talked about – compensation,” Weikel touched on the ever-present elephant in the room whenever the technician shortage is mentioned. “Like any other industry, appropriate compensation is key to ensuring repairers can draw talented staff into the business and support the training and equipment cost to keep shops ready to repair modern vehicles.”
On the flip side, the industry’s efforts to increase the number of qualified technicians will be irrelevant if there aren’t enough operating shops available to employ them.
So, how can shop owners position their businesses to survive the storm and keep their doors open amidst the rising tide of technology?
“Embrace the EV repair landscape, and start preparing for it,” Olsen stressed. “Identify your particular market’s needs, and choose to commit to the standards involved with that. Identify the things you aren’t prepared for, and partner with another business that you can sublet to. The worst thing a shop can do is take on a repair that they’re not properly equipped and trained to complete.”
“There will be a lot of new information for repairers to learn, as the vehicles of 2030 will be even more complex and sophisticated than they are today,” Weikel forecast. “To be ready, shops need to make the use of OEM repair procedures their standard practice – from the beginning to end of the repair – today. That is why Auto Innovators is working with repair associations on state legislation to mandate the use of OEM procedures in all post-collision, insurance-funded repairs. It is the key to both proper repairs and proper payment. To help repairers repair the cars of tomorrow, automakers have also worked with California regulators to ensure EVs will be equipped with an OBDII-style port to access vehicle data, so technicians will not need to learn a whole new system just to work on EVs.”
Carey suspects, “By 2030, we will have certified shops that must certify repairs and attach an electronic package to the completed repair, together with all of the electronic documentation that identifies the procedures used, the diagnostic and calibration reports, the parts used and quite possibly which technician(s) repaired the vehicle. For me, the primary concern is not the passage of time or even the make of the vehicles on the road – it’s about preparing for a future (long before 2030) where we are clearly documenting that a safe and proper repair was performed.”
“Know your market area, and regularly understand how it is evolving,” Allen advised. “Develop a business plan, and if you don’t know how to do that, I’d honestly recommend that your first investment be hiring a consultant. Work the plan, refine the plan, adjust the plan. As an entrepreneur, you’ve accepted that you’ll be the one making decisions. The upside is that you don’t have to answer to a boss, but the downside is your decisions impact other lives in your organization, including your own. It’s okay to ask for help. It’s your future, but there are others who are willing and able to help professionalize your business and see it grow to the next level of sustainable profitability.”
How are New Jersey shops preparing for the onslaught of EVs and other advanced technology? Find out in “Navigating the Storm: Shops Prepare for the EV Evolution,” slated for next month’s New Jersey Automotive.
Want more? Check out the June 2022 issue of New Jersey Automotive: