That’s 10% of the average pre-pandemic yearly pre-tax profit of a dealership if WardsAuto is to be believed. So very much doable but not insignificant.

For a once in a generation shift in technology? There are probably individual pieces of equipment in the service department that cost more than that.

I doubt that very much. Fanciest machine in a stealership is probably the wheel alignment machine, and a top-of-the-line Hunter will set you back about $35k.

The typical two-post lift that's in every bay is like $3000. The various dealer service tools (several-generation-old toughbooks with a 500% markup) are also in that ballpark. Then you've got various flush and fill machines, refrigerant recovery and vacuum, etc, in the $1-2k range each. And then there's a whole menagerie of special little jigs and thingamabobs that're probably each in the $20-200 range, but which save a lot of scraped knuckles and swearing and such.

If you head to a performance tuning shop, you might find a 4-wheel chassis dyno worth about $50k or maybe more, but dealerships don't have those.

Or, 1-2% a year if you spread it over the next 8 years to get ready by 2030.

Exactly. This is a perfect use case for a bank loan.

Those vehicles are all there on borrowed money, and I'm sure it ain't the full purchase price that's needed.

A company with $2M/year in profit should have no issue getting a $200k loan for improvements they'll be using for the next decade.

They may already be maxed out on their line of credit. Companies aren't fools and they take advantage of leverage (borrowing) to maximize their profits.

If you're going to assert the average car dealership's $2M of annual net profit can't handle a $200k capital expense that can be amortized over a decade or more, you're gonna have to gimme a bit more than "maybe they're out of credit".

Obviously the dealer or his creditors don't think he can handle it. They know their business far better than you or I. It's doubtful they'd be foolish enough to pass up a sure thing.

To be fair, the profit margins for dealerships on those vehicles are more like single-digit thousands.

Dealers have razor thin margins, like 1-2%. They make it up in...creative ways.

There’s nothing creative or secret about it, they make the most of their money in the Service department. All the doc fees or loan kickbacks, etc. are the same if its EV or ICE.

I think hesitancy by dealerships is in the long term EV’s require much less maintenance and that means their service and profits will be much less.

Average dealership makes ~$2M/yr. Their margins are very high. I think you're referring to their margins on the sale of automobiles. Those are like the Big Mac.

Their service departments are equivalent to the much higher margin soda.

Most dealers have their Floorplan financed, i.e. FMCC for Ford/Lincoln, NMAC for Nissan, as well as other independent players