Industry Advice Ask Mike: Is the EV Investment Still Worthwhile?

with Mike Anderson

This month, we “ASK MIKE” to share his thoughts on whether pursuing electric vehicle (EV) repair is still a viable option for independent shops. We at Hammer & Dolly hope you find the following exchange useful, and we encourage you to reach out to us if you have a question for Mike on this or any industry-related matter that he can answer in a future issue.

Hammer & Dolly: Electric vehicles have been the talk of the town for years now, with ongoing discussions about their potential to reshape the industry. You have years of experience consulting with shops that have ventured into EV repairs. From your perspective, where do you see EVs’ current presence in the industry? Is it still the game-changer that everyone thought it would be a few years ago? 

Mike Anderson: It’s similar to the transition with aluminum. There was a lot of skepticism when it was first introduced. As people got educated, those myths were debunked, and the industry adapted. EVs are on a similar trajectory. While I don’t have a crystal ball by any means, it seems that political attention on EVs is shifting — Republicans don’t seem as focused on it as Democrats once were. EVs’ long-term impact on the industry depends on how quickly adoption rates rise. 

Based on how things stand today, it’s essential that shops stay proactive, research trends and stay updated on advancements, especially if they’re certified for specific brands. In areas with a high EV presence, continuing this research can give shops a competitive edge in the future. Shops that are well-positioned with the right training and equipment stand to benefit as adoption rates grow, but staying flexible will be key as the market continues to evolve and diversify.

H&D: For your shop clients who’ve invested in EVs, how would you assess their current return on investment in terms of equipment, training and overall profitability? Are they seeing steady demand, or are there challenges in recouping their investment due to market fluctuations or customer volume?

MA: Some shops have seen a lot of work with certain EVs. The shops I’ve talked to that have invested in Rivian seem to be busy and are getting a lot of work sent to them. However, some other EVs haven’t generated as much work. Some shops are now rethinking their decision and questioning whether the investment has been worth it given the uneven demand and profitability.

There are two key factors to always consider: return on investment and return on objective. Some businesses might not be seeing positive ROI, but they continue to pursue EV work primarily to safeguard their market position. For them, the goal is to prevent competitors from capturing that business, ensuring they maintain a foothold. Many are viewing their involvement in EVs as a strategic move – not just a financial one. It’s a way of future-proofing their business, even if it doesn’t generate immediate profit.

H&D: You owned shops in the WMABA region. If you were on that side of the industry today, what would be your position on EVs? Would you make that investment? 

MA: Absolutely. In the Washington DC/Maryland/Virginia area, there are enough EVs to support a move in that direction. Sometimes, you must hedge your bets. It’s like retirement – investing not for immediate returns but for long-term growth. If I were still operating a shop in the WMABA region, I would definitely focus on repairing EVs. Of course, starting out always carries risk, and you must weigh the odds against your investment carefully. However, if you already have most of the equipment, the investment is relatively minimal, and the potential for success is much higher. Ultimately, the key is evaluating whether the venture has long-term growth potential. Take GM’s BrightDrop, for example, which could expand significantly in the future. Adapting to these trends early could position a shop for greater success down the road.

H&D: You mentioned aluminum earlier, and we all remember when that wave hit. A lot of independent shops made a mad dash to get as educated on it as possible, which is always a major concern whenever we’re hit with something new. Is the industry providing adequate, easily accessible information on EVs to the independents?

MA: I-CAR is certainly stepping in and trying to fill that void, and we have OEM-specific training. The OEMs are doing a good job of rolling that out. 

H&D: Besides EVs, what are some other investment opportunities that may offer a clearer crystal ball at this point in time?

MA: Doing service work on the mechanical side is a very different business model, but it could be a valuable investment. Bringing your glass work, alignments and mechanical repairs in-house may be worthwhile for many shops. Back in the ‘60s and ’70s, shops often sublet their frame work, but over time, everyone started bringing it in-house to have more control over costs, quality and turnaround times. I think it’s the same scenario with mechanical work today. While calibrations may not be the best option considering the amount of space needed to perform them correctly, there are many other services that shops could be performing in-house — things they’re often overlooking or underestimating. Expanding in this way could help increase overall efficiency and profitability.

Want more? Check out the March 2025 issue of Hammer & Dolly!