NASHVILLE, TENN., Dec. 6, 2021—A need to take a more holistic look at vehicle repair could be the key to successfully adapting to the vehicles of the future, argued 3E Ventures founder John Sweigart during his keynote speech at the ADAPT: Automotive Technology Summit.
Sweigart is a former collision and mechanical repair shop owner, fixed ops director and is well-known for his stints at Tesla and Lyft Service before founding his own company. That experience has afforded him a unique perspective on the future of the industry, which he shared with ADAPT attendees.
“A lot of people are afraid of the complexities in these vehicles but for us in these industries, it’s an incredible opportunity for us to turn these industries upside down,” Sweigart said.
Sweigart dove into the differences between electric vehicles (EVs) and autonomous vehicles (AVs) compared to current internal combustion engine (ICE) vehicles.
For EVs, those differences include:
- The vehicles are simpler. They contain only 10 percent of the moving parts of ICE vehicles.
- They contain uncompromised structural design.
- The vehicles are true mobility platforms, meaning certain software and feature upgrades happen over-the-air (OTA).
- The capability for performance and self-repair. “You could have the car for 20 or 30 years, the engine's going to last 1 million miles, but you can change the fascia or the interior or whatever you want,” Sweigart said.
When it comes to AVs, the differences include:
- The incremental handing-off of responsibility and workload.
- “If there's a problem detected, the car will pull off to the side of the road,” Sweigart said. “Maintenance, inspections, updates are going to be much more critical in the future. If it’s going to be fully autonomous, it will require sign offs that the vehicles have been inspected.
- Everything now counts, creating a new level of interdependence in the vehicle.
“The paint, the windshield, it all counts. So, the idea of specializing doesn’t make a lot of sense. You’re going to have to know how to fix everything. In order to keep the car running, you can’t sublet it all out to various vendors because everything is interdependent in self-driving cars,” Sweigart said. “If you think about where the car came from, there are a bunch of different builders.
The industries all formed around that: body shops, service shops, transmission shops. “This thing is not that. Tesla really thinks they’re more of a power distribution company than a part company. If that car can power your house, it knows when you can pull power off the grid. The level of knowledge required is going to be much different. I’m not saying it’s going to be hard, but it’s different.” - Because so much less is required when it comes to the maintenance of the repair, more will be required of the repairer, namely through a holistic understanding of the entire vehicle.
When it comes to service, Tesla founder Elon Musk is infamous for declaring, “No service will be required” but Sweigart said that’s patently untrue—partly because the automaker has ignored that service and repair component.
Many of these new automakers, such as Tesla, Rivian and Lucid, have no desire to build a dealer network, Sweigart said, mainly because it’s a way to cut out the middleman. No dealer means the OE is able to make margins all the way from raw material to the end user, also increasing gross profit per vehicle. That means there’s little desire to make profit on the service side, Sweigart said.
“Service is an afterthought at the EV-OE level. They just go out and bring people in from legacy OEs to run service. The problem is they don’t fix cars,” he said. “The OE can create procedures, tool, but they don’t fix cars. They have dealers they support. And they really don’t like each other that much! I think this is an incredible opportunity for us. Someone has to fix these cars—Tesla doesn’t want to—so if we pay attention right now, that’s great for us.”
However, to take advantage of that opportunity will require, again, that holistic approach, Sweigart said. He believes it will mean the end of the specialization shop—tire, oil change, car wash, body shop, glass repair—and the advent of knowing everything about how to fix that product.
And that, he believes, needs to come from the aftermarket, not a large national provider.
“It needs to come from us. Otherwise, there are a few big national chains that are thinking in these terms and putting cash together,” he said. “I think that’s the wrong idea and needs to come from us, who know the business better than others.”
