Tim Hovik on Navigating EV Sales Amid Industry Shifts

The EV market is shifting as automakers recalibrate investments and production, and dealers must adapt to a new sales landscape. On this episode of Inside Automotive, Tim Hovik discusses how these changes affect dealerships, consumers, and the broader automotive economy. Hovik shares insights on EV sales trends, generational adoption patterns, and what the “second-generation” EV market could look like as incentives wind down and technology evolves.

He explains how consumer behavior, charging infrastructure, and household vehicle strategies are shaping demand while highlighting the opportunities and challenges for dealers navigating a transitional market. Hovik also provides perspective on the used EV market and its emerging role in dealership operations.

Discussion points include:

• The impact of federal tax incentives on EV sales and leasing trends
• Automaker production adjustments and regulatory pivots
• Emerging used EV market dynamics and pricing
• Generational adoption patterns and dual-EV household potential
• Technological advances reducing range anxiety
• Economic outlook and its influence on consumer confidence

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Transcript

Welcome And The EV Pullback

Jim Fitzpatrick 0:07

Welcome to Inside Automotive with Jim Fitzpatrick. Hey everyone, Jim Fitzpatrick. Welcome into another edition of Inside Automotive right here at CBT Automotive Network. Several Detroit automakers are scaling back EV investments, canceling projects, and redirecting production. So what does this look like for dealers on the ground on the front line? Joining us today is Tim Hovick. You've seen him here before on CBT News. He's a dealer principal at Santan Ford in the great state of Arizona, and who's uh previously joined us, as I said, to talk about his record-breaking sales and EV. We've EV sales, we've had him on here to talk about that. Which uh Tim, thank you so much for joining us once again. And last time we were on, we were, I think, congratulating you because you were the leader in EV Ford sales nationwide. And so here we are, fast forward. They took away, they they they snatched that tax advantage from you. And so, what do EV sales look like today?

SPEAKER_01 1:02

Well, you know, the the world changes, right? The uh, especially the auto industry, it's uh it's ever changing. And uh clearly the EV space, uh, we've all read all the headlines, and uh those of us in the industry are living it. It was uh a pretty big change uh when the new administration went in a different direction. So uh EV sales have slowed down. Uh we are still selling EVs. I don't think EVs are going away, yeah, but I think uh we're entering a period where it's gonna be more natural market demand. Sure. And I think uh with the with the tax incentive that we had for that period of time, it created a little bit of a of an artificial demand.

Do EV Buyers Come Back

Jim Fitzpatrick 1:41

Yeah, yeah, for sure. I could see that. For the people that you've sold EV EVs to in the past, and you sold a lot of them, are they coming back in and buying EVs again?

Ford’s EV Pivot And Dealer Pressure

SPEAKER_01 1:52

Yeah, we're on the we're on the kind of the beginning of that uh you know cycle. And absolutely, uh with very little exception, uh, when you've driven an EV, I mean, and it's again, they're not for everybody, just like a super duty diesel uh isn't for everybody. Sure. But uh if the use case makes sense, I mean they're they're fantastic to drive. Yeah. They save a ton of money in gas. Yep. And uh I think the biggest thing that we've seen in the EVs uh that we've sold over the past few years is just how much people uh appreciate the performance. Yeah, you know, I think everybody kind of gets tied up into the compliance, and certainly there's a piece of that with the regulatory world. Sure. But actually, a consumer, I mean, they flat out enjoy driving these things. Yeah, yeah, for sure.

Jim Fitzpatrick 2:44

Now, Ford, as you know, they were going all in on EVs, even right down to telling the dealers, hey, you got to retrofit your stores, spend some money, some real money, uh, otherwise you're not gonna be selling EVs. And that was a couple of years ago. Obviously, that's has since changed. Um, but even uh like the lightning, they said, eh, not so fast, you know, that we're gonna maybe put this to bed. So where from a Ford standpoint, obviously you're a big uh Ford dealer, um, where does that stand? Are you feeling that from Ford where they're really backing off and dialing that way back?

SPEAKER_01 3:15

Yeah, I think it's a pivot. You know, we we joke all the time, right? The more things change, the more they stay the same, and especially in the auto business. Oh, yeah. So I think it's a pivot. EVs aren't gonna go away, but I think we're gonna get to kind of a second generation EV. I think, you know, manufacturing's a little clunky when it has to deal with uh government regulation because the regulations can change so fast, yeah, yet the manufacturers he they're looking at what they're gonna have in my showroom in 2030, 2031. And they're and so you're always a little bit of a guess as to what that regulatory climate's gonna be. Yeah. So when it switched as fast as it did, uh, I think it left the entire industry a little flat footed. And as a dealer and a consumer, you know, we're we're kind of the two entities that are sort of caught in between, you know, the world of the timeline of manufacturing and the regulatory climate and what we currently have available uh on our lots to sell.

Jim Fitzpatrick 4:16

Yeah.

Mach E Deals And Incentive Whiplash

SPEAKER_01 4:16

So I think uh it's been a little bit uh, you know, kind of left and right and a lot of zigs and zags and policies are uh I'm not sure how long they last. Sometimes it seems like they last a week, sometimes it seems like they last, you know, a month and so forth. But uh uh for us, you know, ultimately we have a good product to sell with the lightning and the mock-e. And uh we're just trying to, again, uh let consumers know that they're not going away. We stand behind them and it's a good product.

Jim Fitzpatrick 4:47

Yeah, for sure. Man, with the Mach E. Uh, my sister-in-law purchased a Mach E during the last few days of when the incentives were in in September. Man, she got a deal. It was like 239 bucks a month or something for on a 24-month lease because of the incentives. And I just I could not believe the deal on those vehicles. You must, they must have been flying out of the showroom.

SPEAKER_01 5:08

Yeah, I mean, you think about our entire portfolio of products at Ford, and for a considerable amount of time with uh with the subsidy and the tax credit that we had from uh the government, they were actually our best payment vehicle that we had. And and they weren't the least expensive vehicle. Yeah, but because of that incentive, and as you said, especially on a lease, uh, yeah, they were flying off the wall. We're still selling a lot of them, yeah, but it's it's it's just it's a little different conversation, it's a little different pace, the deals are structured a little bit different. Um, but again, I still think it's a it's a great product and people do enjoy driving.

The Used EV Price Ceiling

Jim Fitzpatrick 5:48

It really is. The lines of the car, the design of it, and my my uh sister-in-law absolutely loves it. I've driven it a few times. It's like it's just a great car all around. What about the used car market for EVs on both the trading situation? When one comes in on trade, does that make you nervous? Uh and then also is the market there for used EVs?

SPEAKER_01 6:10

You know, it's a great question. I think again, we're early in this in this game as these vehicles are starting to cycle through. Really, what we're seeing is um the market is beginning to kind of catch up to the used EV uh space, but we're seeing it's a pretty constant number. It really doesn't matter what the what the so-called book value of an EV is, doesn't really matter the brand. Uh a used EV is worth about$30,000. It really doesn't matter any other piece of it. That's about what it's worth. And and I tell you that because that's what we can sell them for, right? We know in our business uh vehicles are worth what somebody's willing to pay. And that's the number that seems to be kind of the magic one. If if you if you take in an EV and you take it in for in that$30,000 range, yeah, uh there absolutely is a market, but you start getting into the the$40,000 or$45,000 used EV market, and uh uh you you get some crickets out there. You don't see a lot of customers coming around that.

Jim Fitzpatrick 7:15

That's right. That's right. Now it seems as though leasing is much more popular on EVs with other brands. Is that the case with Ford and where do you stand on that? Are you leasing a lot of uh these vehicles uh when they do roll out?

SPEAKER_01 7:28

Yeah, I think um not as many as we were. We're still we still have a heavier lease mix on the EV product than on the rest of our portfolio. But the incentive that we had uh in the tax credit from the government, it skewed uh more uh and was more favorable from a payment standpoint on a lease. Okay. So as that went away, yeah, um, it's become more of a level playing field. It's become a little bit more like other products where you're okay, a lease makes sense for this customer, but not this customer. It's kind of fallen back in line with our portfolio, although we still do lease more than than we do the rest of the brand.

Jim Fitzpatrick 8:09

Okay, gotcha. Out of the vehicles that you sell, what percentage of them today are EVs?

SPEAKER_01 8:15

So about half of what we were. So we were uh we were up and we were pretty much a you know plus or minus about what the industry is, which is it was running about 15%. Okay, and we're now back down to about a 7% clip. So it's definitely uh the change in the regulatory climate uh and getting back to a normal market-driven um economy and a market-driven industry, it's really cut it in half. Now, having said that, I think now we're gonna see the normal growth. You know, I think when the it was kind of like this when you had all the incentives on it, yeah. And I think now you're still gonna see growth. Every manufacturer, nobody's backing out of it. You know, the headlines would lead you to believe that, but everybody's just kind of recalibrating, I think, the pace of the growth. And I still think, you know, over the next few years, you're gonna see more EVs made each and every year. Yep. And uh they're gonna be different maybe than what we originally thought they were gonna be, maybe different price points. But uh uh EV isn't going away, it's just uh it's a changing environment.

Jim Fitzpatrick 9:23

Sure. Do you see from a uh generational standpoint uh younger generations being more open to an EV than maybe a baby boomer or or what have you? Is that is that a safe assumption or or is it kind of the same across the board?

SPEAKER_01 9:37

No, I th I think there's something to that. We've seen uh maybe a younger base, maybe a uh a college graduate, um, you know, maybe, maybe second car, maybe they're five years into their career. Okay. Uh that's been one of the main spaces. The other space, and I think this is where the growth will continue as we move forward, let's call it over the next decade, is I I really still believe you're gonna start to see more and more split garages. People that have two vehicles, I think that's where the the majority of the growth is gonna be. It takes away the range anxiety and and all the the things that you hear about why we shouldn't have an EV. There's a there's a lot of reasons why you should. Yeah. And I think we'll start to see, you know, households that have two vehicles, yeah. I think you'll see one ice, uh, and then you'll see one EV. And I think that's that's the that's the big growth opportunity uh as we move forward.

Range Anxiety And Faster Charging

Jim Fitzpatrick 10:32

Yeah, very good. That's a very good point. Uh somebody that I was uh speaking with a friend of mine said that they did just that, where one was an ice vehicle and one was the EV. However, they said that over time, every time they go into the garage, they found themselves gravitating to that EV. And it was just, well, even if it was uh, you know, a trip that might have been 100 miles or 150 miles early on, they're like, oh, let's take the ice. But then they said, well, wait a minute. This has got you know a 300-mile capacity here. We're gonna go 150 miles, let's just use the EV to the point that on their next go-around, they're gonna buy another EV. So it'll be a two EV garage now and not an ice vehicle. Or that we're probably starting to see some of that happen too.

SPEAKER_01 11:13

Yeah, I think that'll be the next, that'll that'll be kind of the second evolution. Yeah, and to your point, when you really think, I mean, think about yourself and your family or yeah, you know, most people out there, you know, how often do you drive on on a Tuesday, right? You know, 200 or 300 miles in a day. It doesn't happen very often. That's right. And so for most households, they probably could could have two EVs. And I think the other thing that's gonna change, uh, you know, as the technology continues to evolve, I think the biggest thing we'll see change is we'll see charge times come down. Yes. And and and so, you know, even in a even in my ice vehicle, I have an expedition as one of my vehicles. I mean, I have a range on that. I mean, I can't drive it a thousand miles without stopping at a gas. There's a range on everything, but I can fill that expedition up faster right now than I can charge an EV. As that difference kind of closes and the gap gets closer and closer, then the range anxiety is no different than it is that you got to go get gas if you if you're going along with it. If you could plug in an EV and in 15 minutes it was completely back to charge, and you're on a family trip and you stop and you get a big gulp and you do your thing, and you and you by the time you come back to the car, it's the same as a as a as an ice vehicle.

Jim Fitzpatrick 12:37

That's right.

SPEAKER_01 12:37

And I think that that's where I think the technology stands, the the quickest gain will be in charge time.

Tariffs Consumer Confidence And 2026

Jim Fitzpatrick 12:44

I agree with you, and I do think that with the with it uh traveling as at such a fast pace right now, we will see the technology over the course of the next three to five years just change the whole EV landscape. I I I agree. I agree. Well, I'd be remiss if I didn't ask you how's the rest of your business going today?

SPEAKER_01 13:01

You know, it's pretty fair. It's pretty fair. You know, you know, the the car business is a little bit of a cyclical event. Yeah, and uh we uh we're coming back up the hill. Usually the start of January is kind of the the the lower canyon, yeah and uh and it's it's wasn't bad. It's just that's that's business. Yeah, and it'll come up. I think as we look at 2026, uh I'm fairly bullish on the year. The one caveat I would say, we really haven't seen the effect uh of the tariff policies yet. Yeah, but we're starting, we're we're gonna see that. I think I think most of the manufacturers held uh without kind of they kind of ate the tariffs at the end of last year. And I think it was because the policies were changing so fast, you weren't quite sure what to do.

Jim Fitzpatrick 13:49

Right.

SPEAKER_01 13:49

But there it's just it's not sustainable. And so we're gonna see some some price increases due to that. And I think the the the data that I would look at the most is I would look at the consumer confidence index as it rolls this year because you know we're a consumer-based economy, yeah. And if confidence stays high, then I think uh the market will be okay with absorbing those tariff costs. Yeah, I think if the consumer index uh comes down and it did dip a little bit in January, that's where I start to have a little bit of concern. If if the consumers uh are are not feeling rosy about uh a lot of things economically, then the tariffs and the price changes uh could stand to be a little bit of a tug against us, though, for some headwinds.

Jim Fitzpatrick 14:41

That's right. That's right. I I would agree with that uh assessment. Um and and we I think in May, you know, there looks like there's gonna be a new Fed uh chief installed. Uh something tells me that the deal's already made, that those rates are coming down, you know, once Trump puts that new person in place. So that that could be a big plus for the industry, right? If we see a a pretty substantial drop in the in the rate.

SPEAKER_01 15:05

Yeah, I, you know, as they say, uh the back room, uh, the backroom deals, I think there's probably some sort of a blood oath that's been taken on the fact that the new uh the new Fed chair, I think I would agree. He absolutely, even though the Fed is independent, oh yeah, yeah, independent, right, I'm pretty sure when he takes over, uh we will see some rate uh that's right uh decreases. And hey, at the end of the day, uh selfishly, that's great for the auto industry. That's great for it's great for consumers on big tickets. I understand. I well, I shouldn't say that. I don't understand all the complexities that the Fed has to deal with and the inflation and the unemployment and all those things. But you know, we trust uh that they're pretty good at it, at least we certainly hope so. But I think for for our industry, and again, um housing, another one. Uh I I always tell people when I'm out talking to business groups, we've never had a recession uh when the housing in auto is healthy, and we've never not had a recession when housing in auto is in trouble. That's right. Hopefully, we'll uh the consumer index will hold, yeah, we'll be able to absorb those tariffs and at the same time uh offset a little bit of that with some rate help and uh look out. Maybe 2026 could be a rocket ship.

Jim Fitzpatrick 16:24

I know, I know. We might be too conservative at uh 16 or 16.2 SAR that they're proposing. It could uh could jump up substantially. I let's hope it does.

SPEAKER_01 16:33

So I'm a I'd be a big fan.

Jim Fitzpatrick 16:35

Yeah, I bet you would. Tim Ovick, dealer principal at Santan Ford in beautiful Arizona. I wish I was out there right now. I could use the nice warm weather. So thank you so much, Tim, for joining us on the show once again. Very much appreciate it.

SPEAKER_01 16:50

Always a pleasure. Great, thanks.