There is No Money in Hybrid or EV Repairs

In 2017, the owner of the shop I currently work at returned from a Bottle Line Group meeting he had just attended; he approached me and said, “Russ, we need to get into working on hybrids,” as the lead technician on flat rate pay at the time my first thought was, there was no money in repairing hybrid or electric vehicles. Yes, we have customers with them, but all we did was basic services, and at that time, I had only taken one training class on them, and the information at the time was minimal, so I was not super enthusiastic about this request. 

I put off the request for a few weeks, and then he approached me with a training event for hybrids; I reviewed the program and found it was tailored towards engineering-level training. Knowing he would not let this go, I decided that if he wanted to do this, I better take things into my own hands. I started to do research on training programs available, especially looking at hands-on programs. What I found was a one-week class in Portland, Oregon, presented by Dr. Mark Quarto of Future Tech. I figured I may learn a few things, and at the least, I will get a week paid for going to Portland. 

That week of training with Dr. Mark changed my career and our shop. The information and training he provided were, to say the least, eye-opening. Not only were his lectures interesting and informative, but the hands-on training was just what I needed. His stories, which he would talk about throughout his career, made it one of the best training events I ever attended. 
When I returned from the event, I went straight to the owner and said, “We need to do this; what do you need me to do?”  his response was, “It's your program; do what is ever needed and let me know the cost,” and so it began. So here is the journey of how we implemented our Hybrid and Electrified Vehicle program into our existing shop model. Now, I want to be clear: we did not implement this program to become Hybrid and EV specialists, just to complement the services already provided to our customers. 

As the lead technician at the time (now I am the shop foreman and still the lead hybrid technician), I had never been faced with a task like this. I have written all our (Standard Operating Procedures) SOPs and implemented our safety program, but this was something entirely new for me, and I was up for the challenge. 

Firstly, I researched our database for existing clientele with hybrid or electric vehicles just to see how many we had, which was a daunting task due to our old shop management system at the time (which we have switched to a newer platform), and then we were also provided with a list of hybrid and electric vehicles in operation (VIO) within a 25-mile radius of the shop, to which I was astonished, at that time we had 80,000 VIO around us (which has now grown to over 120,000). So, I intended to focus on our existing customers due to their loyalty and just 5-10% of the remaining market. I know that sounds low, but we are a small 3-bay shop, and I wanted to keep expectations realistically. 

NOTE—This is key research. If you are in a smaller market, your investment will differ from ours. 

We started with our existing customers by discussing our new program we would be implementing to get their feedback, and it was all positive; come to find out, a majority of them were taking their hybrids back to the dealer for any significant type of service and where very excited to hear that we would be able to service their vehicles and eliminate them having to go elsewhere for repairs. This was very eye-opening; we were letting money go out the door when we should not have to, and these are very loyal customers. 
When customers brought their cars in for service, I started performing a " High-Voltage battery stress test,” which I was taught during my recent training event. I logged all the data for each vehicle to be used later. At the time, it was all done using a scan tool, reviewing, and analyzing data from the HV battery to determine its overall state of health.

Note—Future Tech now offers Battscan, a Voice-Guided App that simplifies this process.

Now that we had solid numbers regarding our existing and potential customer base, it was time to determine our equipment investment. Knowing your customer base is crucial here. We decided to go all in and purchase the tier 4 equipment and training package from Future Tech/NxtGen Solutions. (they offer four different levels of equipment, or it can be customized)
Visit Futuretechauto.com for more information. 

This included all the equipment required for battery diagnosis and rebuilding, motor testing, power inverter diagnosis, DC-DC converter diagnosis, regenerative braking diagnosis, and more. We also received online training modules (Access on Demand), including training for technicians of all levels and service advisors and a two-day hands-on training with the equipment. Full disclosure: This package is about the cost of a new alignment machine, but our ROI (return on investment) was less than 18 months. 

During our waiting period for the equipment to arrive, everyone in the shop was required to perform the required online training modules; this preparation gave me the knowledge and opportunity to start working on the services and price structures we would provide, SOPs, and safety procedures for the program. This took many hours and countless weekends; we were provided with some basic information, but not enough to complete my task at hand. I created a starting point for our essential services to be offered and price structure, added inspections to our DVI system, and created SOPs for all services along with the flow of the process from the service advisor to the technician and back to the service advisor for sales. These processes and procedures changed significantly in the first year (and continue to change) as I learned the ins and outs, what worked, and epic failures. After seven years of implementing the program, I have it very dialed in now, but like every new program, it took time. 

The most challenging thing to implement was the costing structure, including how much to charge for diagnosis, HV battery analysis and reconditioning, component testing, etc. We as an industry are using service information to obtain these times, but in the Hybrid/EV world, these times don’t exist. I spent much time clocking in and out of specific jobs to determine fair times for both the technicians and customers. 

Note- Future Tech Auto now offers the” Wheels in Motion” program to assist in this process. 

Next up was marketing. This wasn’t my strong suit, but I produced some basic marketing ideas. 
I created some basic information on the services we were providing, including descriptions, a tri-fold handout with those services, and a list of acronyms for the Hybrid/EV systems. I then put all the information in a nice packet for the customer. (We still do this with all our new customers.)

First, I focused on our existing customer base; this approach gave us a feel for what the market was looking for and the pricing structure that would work. This approach and the above packet were received very well by our customers. What was interesting with our existing customer base is once we would discuss the program with them, we found out that they had neighbors, friends, or family members with Hybrid/EV vehicles who have been looking for a repair shop, and with information just sitting on the front counters (and other placement of information) we found we had customers that owned Hybrids/EV vehicles and never knew it.

Then we tried direct marketing to some selected areas, but that was a failure. 

Word of mouth and Google reviews, other than existing customers, have been our best marketing outreach. The owner upped his game for Google AdWords presence, and that was a game changer, along with switching our website management company. 
Again, I would start with your existing customer base. They are your best source of information and what your market will support. Then, develop a marketing strategy around that and explore other ideas and opportunities. 

The actual implementation is key! 

There are a few ways this can go: either you, as an owner, were somewhere and someone suggested you get into Hybrid/EV repair, you are seeing more of these vehicles in your shop now (and there are a lot out there now), your technician(s) or service advisor just came back from a training event you sent them to, or your program is just not giving you the return you think it should be. The key is that EVERYONE MUST BE ONBOARD! 

By this, I mean if you and your technicians are all in, but your service advisor(s) are not, the program will not work. If you and your service advisor(s) are all in and your technicians are not, it won't work; if your technician(s) and service advisor(s) are all in, and you’re not willing to support the program financially for training and other expenses, it will not work. Everyone must be on board! I have seen a lot of programs fail due to the above statement. 

Another cause of the program's failure is the lack of cross-training; technicians of all levels and service advisors should all be cross-trained in their positions. Suppose you rely on one service advisor or technician to do all the Hybrid/EV services and sales. In that case, when they decide to leave, which we all know will happen, you must start the process of finding a replacement, which we all know is very difficult at this time, then train them and start the whole process over, who has time for that. If everyone is cross trained properly, if someone exits, the next person can step in, and a new hire can then be trained without disruption to the program. 

Technicians are usually very eager for the implementation of the program. Some may be reluctant to, because they don’t think there is any money to be made on these vehicles, but that changes quickly, and with all the training out there now, more than likely, they are ready to put their knowledge to use. Service advisors and front office staff (if you have someone doing scheduling) are typically very reluctant to adapt. This is where their training is critical; once they know and understand how Hybrid/EV vehicle systems work, the service opportunities available, and how to present those services, they become more comfortable with the information they provide. 

Now that you have done your research, made an equipment investment, trained everyone, implemented your marketing strategy, and have everyone on board, what's next?

To be clear, a successful implementation of a program will not happen overnight. The first two years were remarkably interesting, to say the least; a lot of trial and error, things that worked great, and complete epic failures. I will say this, I implemented the program in late summer of 2017. At that time, as a technician, I was reaching burnout after almost 40 years in the industry as a diagnostic technician. I thought there was no money to be made on these vehicles, and the public would never accept them. Was I wrong? Since we launched our program, our ARO (average repair order) has been $792, HPRO (hours per repair order) is 2.9 hours for both hybrids and electric vehicles, and these vehicles account for 15% of our annual revenue, which might not seem like a lot, but that is 15% of new revenue. As a flat-rate technician, I have made a lot of money working on these vehicles, and I know our service advisors have done the same. 

Finally, with a properly implemented program, proper training, equipment, and marketing strategies, it will work. It will take time, so be patient. THERE IS MONEY TO BE MADE WORKING ON HYBRID AND ELECTRIFIED VEHICLES. 
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For more information on training, equipment, and other services available, please contact Future Tech at  https://www.futuretechauto.com/.

​Author: Russ Hutton