We are back with Oliver Phillpott from Generational to discuss used EV values and stock turn.
What you’ll learn
- Battery health needs to linked to used EV values
- The need for a healthy used EV market
- How to improve stock turn in used EV’s
- Customer confidence in EV buying process
- Include battery health in your whole sales funnel
If you’re a dealer principal, used-car manager, buyer, or seller of EVs and looking to tighten your EV process. Press play and share this with your sales and buying teams.
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About Symco Training:
Symco Training was founded in 2000 by Simon Bowkett and it was his belief that the business had to offer its clients something different. That difference was clear to Simon from his days in the dealership when he experienced many sales trainers who had all the answers, but were unable, unwilling or both to actually show the delegate how they could be implemented. It remains the ethos of the business today. You see, Symco only employ trainers that are committed to delivering not only in spiring and insightful training, but are equally as happy to demonstrate these skills and techniques with real customers in your own showroom. We believe in order for sales training to be effective and in Simon’s words ‘real world’, it needs to be tried and tested in the only place it matters the showroom floor. There is no room for theory when your goals are for your team to sell more cars, hours or parts and retain more profit. In dealerships around the world the focus applied by many of the sales executives is to try and sell a deal. Symco specialise in getting your teams to focus on selling themselves, the product and then supporting this with the deal.
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Time, welcome to the Selling and the Motor Trade podcast in Association of Car Without. The online car-changing destination. Together we share tips and ideas on how to sell more cars, improve your service department, and generally put more profit into your department, dealership or dealer group. I'm your host, Simon Bowkett, or some of you might already know me as Skippy. First thing, I just want to say thank you for taking the time to listen to this podcast. Okay, so listen, we're dealing with used cars, so it's in and out relatively quickly. No one wants to keep the car more than 60 days, stock turns where it's all about, right? But overall, how are electric vehicle values?
We know that Tesla, what was it, three years ago, dropped the price of 19%. We know that lots of manufacturers had this EV mandate they had to get to, I think it's 33% next year, don't quote me on that. How much is this affecting the valuations of that used car compared to the battery health? I'm asking that question again in a different sort of way there, but if we've got a really good battery health, should it be devaluing as quick as it should do? I want to get your views on where used cars use electric residual values ago. Are they going to get better? That's a really good question. I think there's like, sort of a macroeconomic question, right?
I think there's a few things at play. While there's the fact that this technology is evolving quickly, right? And new makes and models are hitting the market, then there's all the Chinese brands. So residual values are getting hit. And obviously, there's all the incentives from the government on new stock and no incentives on used, right? So there is a bit of a, probably a bit of a mismatch in supply and demand, right? And one of the things we're doing as a business is trying to encourage that demand for use and fill that gap with transparency and confidence, etc. So residuals, it's no doubt about it, have taken a hit, right? But we want to do everything we can to facilitate a thriving used market for electric vehicles, right?
Because the vast majority of transactions in the out of the 8 million car sales in the UK each year are in the used market, right? So like, we need a healthy use market in order for the new market for electric vehicles to function, right? Because otherwise, it's just so expensive. PTPs leasing all that stuff. If there's no value at the end of it, it's we're knacking at the front end. Exactly. And it's in the manufacturers benefit as well to think about this stuff, because they want to sell assets that retain their value, right? Yeah. And going forward as well, I think there's an education piece there, because if we go back to, I don't know, three, five years ago, most people buying their first electric vehicle would probably be buying a new car, simply because there weren't that many used cars out there.
I suppose now people buying their very first electric car, they're probably a used car. And I don't know if they're getting the same education, same knowledge that we in the new car world has been given to people. I suppose there's a huge knowledge cap there, I suppose, for the used car salesperson to give the customer the, I don't know, piece of mind that this battery is safe. Okay, it is going to last a long time. We've tested it. Here's the certificate. You've got that piece of mind there, even talking about charging up to 80%, you don't have to charge at 100%. In the new car world, I think that's second nature now, but I think you're right.
Yeah. But also you've got to think about the fact that a lot of more of the greatest share of this transaction in the use market, these people are potentially going to be owning the car, right? Whereas, like, when you, a lot of these are at least, right? So, like, I think you were telling me before we came on air. And like, I was saying, if you look on a lot of the forums, right? People say, well, it's a lease car. So, you know, I drive it like I stole it. It doesn't really matter, right? Now we charge it all the time. Yeah. Oh, I was going to, Emma's car. I drive it on the weekend and the acceleration, it's quick.
Yes. She says it's heavy on tires. That's my fault, because I just accelerate so fast in it all the time. Yeah. But exactly. So, I think, you know, there are some new elements. I think when you're retailing these vehicles to consider when you're selling used, and it's also around like, you know, exactly the things you're saying. I think people have a theory in their mind that they're not just buying a vehicle, they're potentially buying this liability with this big expensive battery that if it goes wrong, not only going to be left with like a broken vehicle, but like a huge bill. So, I think providing them with the confidence and reassurance that that's like this vehicle is in really good condition and that it's got a good battery really goes a long way.
And also helping them, as you say, if they are going to own the vehicle, helping them look after it, right? So, they get the best usage out of it and likely get the best value for it when they come to sell it in a few years' time. It's a very good point, because anyone who's leasing a car, okay, do they really care about the battery? Do they care about don't charge it 100%, okay? What's the best? Because they're going to get rid of it in three years' time. And again, I'm guilty of that. Emma's car, three years' time, it's on a lease, okay? It will just go back there. But is that going to affect the value of that car there?
Currently, maybe not. But is that going to come in where when we hand the car back? Is there going to be a lady? So, check on the battery off now. This, your answer is not today. So, I mean, we have several ongoing conversations with evaluation companies, because of exactly this reason, right? They can see how the market may likely pan out in the future, but the battery will be fundamental to a lot of these decisions. But in terms of your lease, as they are, are the terms of the lease, right? I think it'll be quite some time until the condition of batteries is connected to pricing of a lease. It's got to be simple and actionable and understandable for people, right?
Because I think it's more likely that maybe there might be some parameters around factors that might cause slightly faster degradation in the battery, like ravaging, things like that, rather than the condition of the battery itself. There's a bit more of an output, right? Rather than an input, there's something that you don't control it the same way as you do with a mileage, for example. So, I think we're a little way off that yet. And the valuation companies also have to, they can't dictate the market. They have to observe the market. So, they even have to gather up a lot of data on how different vehicles are selling based on the condition of their batteries. And then they can use that to update their models and provide back to the lease codes, the retailers on how the condition of the battery will affect the pricing of the vehicle.
But it's happening. It's happening. Okay. This was through Business Card doing some research for this in Europe. They're saying that customers are willing to pay 500 to a thousand euros more for a used electric vehicle if it came with an independent battery health certificate, some sort of test there. Okay. Have you seen a similar trend in the UK? Is it really make a difference? If, for example, you've got a battery of 95% compared to 80% or down to 75%, are you seeing a difference in the real world? Or is it just easier to sell that car that's got a better... It's happening. But I think it's a market timing question. So, right now, vehicles with good batteries, I think the primary difference is they'll sell faster.
And also just transparency, knowing the health of the battery, like removes that uncertainty and helps sell. So, if we looked at our data, I think if you look at vehicles tested with our kit over the last six months in the UK, they've sold seven days faster than every other electric vehicle. Wow. Well, so again, so people test your kit. You've got the certificate seven days quicker. Yeah. So, every electric vehicle, if you compare all the electric vehicles tested with generational kit in the UK over the last six months with every other electric vehicle sold in the UK, the ones tested with our kit sold seven days faster. Wow. The impact on stock turnover, that's huge.
That's absolutely right. It shows you how important this is in terms of information that people want to know. But definitely, the point around valuation is it's still happening. It is happening. It's happening informally. We have customers who, let's say I've got 10 Renault Zoys on my four-court and one's got a much better battery than the other as well. I know I can get a few hundred quid more for that car. It's retailed in the right way. You can see it in context, right? So, it is happening, but it's sort of down to the individual retailer at the moment. And then you've got the flip side, right, of vehicles that might have issues with the batteries.
Clearly, that impacts the the desirability and the value of that vehicle. Yeah, well, actually, if there's seven days better stock term, it is getting that extra profit anyway, because that's straight to the bottom line. If you improve that stock term. Yeah, exactly. That just tells you customers are willing to buy it quicker, pay extra money for that car if it's got a report. So, how do we adapt that into a sales conversation? How do we make sure someone, one of your clients has used your testing equipment. They've got the certificate. When do we get that into the sales conversation without overwhelming the customer, too much jargon customers asking for this? How do you recommend putting that into the process?
I think I would actually think about the whole process, the whole purchasing funnel, right? So, the customers are also doing best. Think about this, not just on the forecourt or putting the certificate in the window of the vehicle, but they might even be doing SEO articles, articles explaining a lot of the things that you and I are talking about today to help educate their potential customers. They might be, we've got companies like Cambria have done really cool work like integrating battery health into the search results page. So, when you're scrolling through the vehicle, you can see it there. And then most of our customers will put the certificate in the image carousel and the vehicle listings, right?
And the idea is you really offer that reassurance at every touch point in the funnel, right? And that transparency, because then you're going to bring in more inquiries and you're going to bring in, you'll have more leads. And also, it's that powerful selling point on the sales floor, right? Because you can turn that uncertainty into a powerful selling point and say, well, look, you don't know what you're getting down the road, but with us, like, you can see that this vehicle's battery is in great condition. Do you still hear some dealers out there catching the cold, taking the risk? I mean, we've all had back in the days where a salesperson's not driven a car and the gearbox is knackered.
Okay. And they've not gone and looked at the car and all these things. Do you still have deals there like not testing a battery and how painful could that be? Yeah, I mean, it does happen, right? Like, and even some of our customers, right? When they test all their stock, I mean, we had one a couple of months ago, they normally test all their cars. And but you know, busy dealership, everyone's like super stretched, like sometimes things just like don't happen in time or things happen out of order took on one car. I think they've done over just over 100,000 miles. It was a seven year old car. That vehicle's battery, they took it in on Pike's change.
Can I ask a quick question there? Okay. So what's more concerned there? Is it the seven years old or the hundred thousand? What you said before, it's probably the seven years old, it's more concerning. Is that right? Or should I not get to just get a test on it? Yeah, broadly speaking, it really depends how it's been used. The whole day age has a slightly higher impact than mileage, but if I was to show you our data, you'd just see like quite a lot of variation, right? You wouldn't be able to try and set them together. It's really hard because you know, someone might have really looked off that battery, right? Give it a lovely, cushy life.
So yeah, they took this car in and it just slipped through the net, right? It didn't get tested. And it turned out that that vehicle's battery had 40% state of health, right? That's why it's a hard car to sell. And you know, you just spend a lot of time. I would say before this conversation, that car you'd almost run off. You can't sell that. It did about 35 miles range on a full charge. Wow. So now, you know, the potentially got to look at getting it repaired or like all the headache and all you put it to trade. A seven year old car, you can't replace a battery in that. That's just not economically viable, is it?
It depends on the route. You know, repair is getting better in this country, but it depends like, you know, can you get the right batteries, the right modules, right? You know, all that sort of stuff, right? So, and it's just a question as, is that something you want to take on as a business like the headache of that when it's all about turning stock quickly, right? Yeah. But listen, battery testing, and again, here's an ignorant point of view. To go and get the car, it's battery tested. I'll go go into the workshop. We go get technician, the diagnosis system. It's too hard. It takes too long. The technicians, they're more worried about just getting this car service because they got red and amber work and they've got to sell more tires there.
I imagine it doesn't happen because it's too hard. Talk us through how you do it. How do you make it easier? Yeah, sure. Good analogy for this, as a gentleman from Falls of Whimsford, who I won't name, but he talks about 100 pound jobs and five pound jobs, right? And he says that we're a five pound job, basically, right? And what I mean by that is we think it's all about making, the battery is so bad, it's so important, right? It's all about making this process fast and easy, right? So, anyone can do it. So, basically, you just have an app on your phone, you have a little generic OBD dongle that you plug into the diagnostic port of the car, you choose the maker model, you run the test, and we give you the results in about a minute, right?
So, there's no difficult elaborate process. Anyone can do it. Like, I've even- So, should I do that or use my, I'm an Audi dealer and just get my Audi diagnostic system, because we could do it out the back there. Yeah, yeah. What's your advantage in using yours? Yeah. I mean, yeah, so a lot of the fans doesn't have to be able to do their own brand vehicles, but that doesn't necessarily protect them on, like, you know, if someone brings a great idea where someone brings in a fiat, right? Like, of course. And the other point is that, like, a lot of our customers want to do this check as early as possible in the process, right?
You want to do a triage as early as possible, and it depends on the operation or process of your business, but, like, you know, you might want, if it's an inspection team, or it might be a salesperson, or, like, you know, for validators, we have to, like, doing it right, who don't want to be spending additional time, money on that vehicle until you make a decision on, like, what's the condition of the path of the value of the vehicle? Yeah. The dead right. Would you buy any car without testing at first? You just wouldn't really want to do that, would you? And you always, it makes it quick and easy to test any car, I suppose.
You showed me how to do it at AM Live. My grandmother could do it. Actually, she couldn't. She's passed away. But anyone's grammowed could possibly do that, because it's just so quick and easy there. That's the real selling point, isn't it? Yeah. I think we really try to focus on speed and ease of use, right? Like, our view is that, like, this information needs to be out there and accessible for people in the market, so they can make decisions, right? So, like, it's honestly, we spend a lot of time and effort trying to make something simple, which sounds, sometimes it's harder than it might sound, right? Like, making something easy. But yeah, we just try and make it super fast, super easy, because we think that, like, everyone, I transparency is just fundamental for any market to operate efficiently, right?
Okay, look, I know we work within the market. We don't create the market. But I'm putting myself into the sales measure or the use car buyers' shoes now. Let's say hypothetically, because you're doing this day in day out, right? You've got a five-year-old car, electric vehicle to trade in there. And the battery test shows that, let's say, 75% of its original capacity. Yeah. How should a DP or the use car manager handle that? Is 75% in your gut feel? Is it a red flag? Is it going to be hard to retail there? Would you consider selling it at that level? I know you said 80% before, but I want to get your gut feel on.
If I'm new to the industry, what's a good benchmark for me to aim for? Yeah, so the most common retail threshold that our customers set is at 80%. So what that means is they would decide not to retail a car if the health of the battery comes in below 80%. Right? They would, and it's just their kind of, the most common rule of thumb, I see, right? Because they say, look, generally speaking, like, if it's about 80s, people think, yeah, okay, that's all right. You know, I can look at that. It seems like a good battery, right? Some said it at 90 if they tend to deal in newer stock, they're the most common ones I see.
My gut feel is they're about right, right? You need to experiment a little bit as to what's right for your business. And also, maybe this will evolve a little bit as the market develops and as the stock ages. But I think they're pretty good benchmarks. And flip side, if I've got that car, three year old car and it's a 95% health check. Oh, the battery, sorry, health. Really, that's going to be on the front page of auto trader everywhere, hasn't it? It's got to be right front and center. This is 95% because someone's going to want to buy that car a lot quicker than someone else's. Get it turned very quick. Yeah, absolutely. Like when we first started the business, there was a sort of fundamental bit of consumer research that we did where we looked at, we gave UK car buyers different options of vehicle to choose from, right?
And they made repeated choices and we looked at the decisions they made. And he's a sort of expensive bit of market research software. But what it told us was that the desirability of a vehicle with an unknown battery health is similar to a vehicle with a battery health in the mid 70s, right? So the fear of the unknown that is that the vast majority of results today are coming out well in the 80s and 90s, right? A percent. So we know that just by adding transparency, you're adding desirability and adding value to the vehicle in the vast majority of cases. But again, if most of them are 89%, that's where some sales mentions, some sales people will skip that test because ah, doesn't matter.
And that's when they'll catch a cold, right? Just do it. Yeah, I think so in terms of numbers, suppose numbers behind this, if you look at all the tests we've ever done in the UK, and we've got a pretty good pulse check of stock on the UK market, 0.8% of the vehicles we've ever tested have a battery health below 80%. So a bit like a little bit less than one in 100. Wow, okay. Okay, that's interesting. Well, listen, looking forward then, and battery technologies evolving all the time. I hear things, sorry, I'm going to be ignorant now, but LFP and NMC batteries and which ones, which I don't know, solid state batteries. Can you just run through the differences?
What should I be looking at as a, as a sales manager? Yeah, now, it's a good question, right? Because like, um, a lot of these times get thrown about in the news. I'll give you my view. Solid state is probably about 10 years away from like mass market production hitting the roads, right? And so probably not something that I would be worrying about today. LFP and NMC are two different battery chemistries, right? They're chemistries that's going to be a different category. LFP is slightly newer to market. LFP vehicles, I think some of the newer Teslas, one of the Volvos potentially, it's a little bit less energy dense and a bit more durable. So you can more cycle count and a lot of the advice to the manufacturers is you can charge those vehicles to 100% more regularly and it's absolutely fine to do.
NMC is a slightly, well, it's higher cost, higher performance, more dense chemistry and it gives you more energy density in the battery. So it's still the vast majority of vehicles out there on the road are NMC, but that one will degrade slightly faster. And maybe in the form of time, that might be a home for your more performance vehicles might be NMC. And maybe the cheaper vehicles or your run around might be more LFP, but we're still very much in that transition. It's worth knowing about if you're retailing a vehicle, whether it's got an LFP battery or an NMC battery. And a consumer starting to ask the difference now. One of the hard things about being a retailer, right, is that you're dealing with every level of, and potentially when everybody comes to EVs, right, like every level of education coming into the dealership, there are people who have been on YouTube for 25 hours just on like this particular, like, really, right?
And then there's people who didn't consider the an EV and thought it was going to set on fire before they stepped into the dealership. So you need to deal with all of those. That's why we try and make your job as easy as possible. And so again, don't worry about solid state batteries just yet. Okay. But 10 years down the track, that's coming. What's the real advantage of a solid state battery? Is it faster charging times? Is it? Yeah, so at the moment, you know, most EVs on the roads, you're only getting like, you know, in the bigger batteries, like a couple of 200 or 300 miles really on the vehicle solid state, you'll get much more range and hopefully be able to charge much faster.
Okay, which is everyone's looking for, aren't they? They want that all the time. Okay, so listen, wrapping this up, I just want to put yourself into the shoes of the dealer principle, the investor, the dealer group. If you're running your own dealership, how would you integrate the battery health check into your operations without turning this into an infocommersal there? Okay, how would you train your sales staff, your praises? How would you market the use car with that certificate? What I'm driving out of here is if I'll go DP, listen to this, give them the checklist that you would go down and put back in place without being too techy, if you can. Yeah, yeah, absolutely.
First of all, I'll be testing on my stock, because we know that people want transparency. It's the number one thing they're asking for and cars will sell bus. So I'd be making sure then that I do the best job I can of putting that reassurance in throughout the purchase funnel. So people know when they're looking through the vehicle, they can see that it's had a battery health check. They know how much warranty is left from the manufacturer on the, whether it's the vehicle is still in that warranty period, make a big deal out of the health of the battery if it's really good. And also, if it's got that full service history, that's even better, to really build in those touch points.
And then I think there's another interesting idea, which is getting your salespeople in electric vehicles, like getting to drive one through the way. So true. So they know the product. It's all very well, like, by all means, start an experiment, buy one or two. Yeah, again, people service the car for them in another electric vehicle for the day. But salespeople, let them drive home electric vehicle, let them charge at home. We know of one dealer group that's actually putting charges in the salespeople's homes so they can see how good it is there. And that's the advice is so good. Please allow all of your just experience, how good the electric vehicle can be. Yeah, yeah, they're quiet, they're quick, packed full of tech, all being well, you look after it, right?
They've lasted really, really long time. And like, if you can charge at home, it's super cheap. So I can ask you a question that there's these other competitors coming out there. What makes yours difference there? Okay, what makes yours better than the others out there? Yeah, always a good question. So I think obviously we focus on speed and ease of use. But the other thing is we very much try and focus around answering the main questions that people are asking today when they're buying a user electric vehicle. So we're giving them not only the manufacturer's state of health, the battery, the remaining warranty, which is like one of the top things that people are asking about today.
And then the real range that that car will do, right? Not the WLTP manufacturer range, but under different conditions, how many miles am I going to get out of this vehicle given the health of the battery? And so I'll get all of that on a certificate that I can get on auto trader, if you had a car or whatever, so customers, consumers can see that. So some of the others, they won't give you the warranty or the real world range or anything like that. But yours will give you all of that. All of that in one place, super easy, super fast. So Ali, how long have you guys been in business? We started in 2023, so we're pretty young, but growing very quickly at the moment.
When you say quickly, what sort of traction are you getting in the UK Motor Train? Yeah, so we're currently working with one in three of the top 30 dealer groups in the country. But PLC groups like Motor Point all the way down to a guy down the road from me who sells cars out of his parents' backyard. Well, that's big, one in three already from 2023. That's definitely getting a lot of traction there, doesn't it? Yeah, at the moment, it's definitely something has changed in the market in the last few months. It's very much a question of trying to keep up at the moment. How do you pay for this as a dealer? You buy the dongles, is it a subscription?
Am I limited to how many cars I can charge it? How does that side of it work? Yeah, sure. So you buy the kit from us, very cheap to get up and running, less kit costs less than 100 quid. And then we charge per vehicle and that cost comes down with scale. So if you're testing lots and lots of vehicles, then it costs best, but equally, if you're only stocking one a month or less, then we also can kind of do it on a pay-as-you-go package. So we're only build when you test the car. Again, what you showed me at AM Live, it's just so quick and easy to do. The dongle, it shows you where to plug it in on the app.
That's what I was worried about, weird or unnot a technician, but again, the app just shows it quickly and easily. It's actually where to go. So it makes no sense. Ollie, I really enjoyed that. It's interesting to see where it's going to go. I think this is going to be standard nature. It's kind of like making sure there was, I was going to say oil in the engine or something like that there, but it's something that we just won't be even thinking about soon, but at the moment, still not out there everywhere, is it? Yeah, no. We're definitely growing quickly, but trying to make this as ubiquitous as possible is our purpose as a business.
So something's definitely changed in the last few months. Just dealing with the inbound is a job and a half, but we just want to try and make this as accessible and easy for people as possible. Ollie, how do people get hold of you? To go to a generation on your website, LinkedIn, what's the easiest way to people get hold of you? Yeah, you can go to my website, which is www.generational.ac or get hold of me on LinkedIn. It's all over Philpot. Either of those, we get back to you straight away. We're pretty responsive. And the last thing I'll leave it your founder was with Red Bull. Do you think Max is going to win it in 2025?
Is he going to come back and get there? Or do you think Lando will get there? I'm an Oscar fan, so I'm hoping he does, but when we're recording this, he's 25 points behind. What do you think? Yeah, yeah. I'm an Oscar fan as well. You won't know me, but he went to the same school I did. So I was an Oscar fan. So go to come for him. Yeah, listen, being an Australian, I absolutely, I won there. But in my house, I'm surrounded by Lando fans. So I'm outnumbered there, but let's hope he gets there. I really appreciate this conversation. It's been great to have you on the podcast. Yeah, thanks. Can you really appreciate it?
That just leaves me to say that all details of this episode and other episodes on the selling in the motor trade can be found on our website simcotraining.co.uk. Go there to get a copy of our book, Words That Sell Cars. Go there to sign up to a free trial of our sales fitness online sales training program. Easiest way to get hold of me is Simon Bowkett, three LinkedIn. Thank you.
