New Jersey Automotive June 2022

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COVER STORY 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 30 | New Jersey Automotive | June 2022

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.”

Who Will Repair 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 –