In the automotive industry’s ever-evolving landscape, the rise of electric vehicles (EVs) is a leading trend. As the adoption of EVs gains momentum, their distinctive characteristics present both challenges and opportunities for service networks. With fewer parts and lower maintenance requirements, the influx of EVs for customer pay service is on the decline. Despite comparable average revenue per repair order to Internal Combustion Engine (ICE) models (with the exception of warranty work), EVs are projected to generate 40-60% less service revenue for retailers and Original Equipment Manufacturers (OEMs).
In this evolving landscape, service networks must proactively adapt to the changing dynamics to maintain viability and offset potential revenue losses.
One promising avenue for generating new aftersales revenue lies in the tyre market. In 2023, a staggering 2,388 million tyre units were globally produced, resulting in a market size of $134.62 billion. The tyre market, which surged from $112.16 billion in 2019 to $126.44 billion in 2022, is projected to reach $176 billion by 2027.1 This anticipated growth is attributed, in part, to the foreseen increase in turnover and/or cost of tyres associated with Electric Vehicles (EVs), adding a dynamic dimension to the market’s expansion. Service networks and franchised retailers can capitalize on this opportunity by embracing tyre maintenance and offering add-on services, such as storage and winter tyre swaps, as revenue generators. Despite the market’s potential, retailers currently hold a market share of replacement tyre sales that remains below 10%, signaling ample opportunity for retailer growth.2
Moreover, proactively embracing add-on services and establishing expertise in this domain will be crucial for the success of aftersales departments in this dynamic automotive landscape.