Today in the United States, there are over 80 models of hybrid electric vehicles (HEV) and electric vehicles (EV) on the road. That’s a total of more than 5 million vehicles or roughly 4% of new vehicles produced. Those numbers are only set to increase with hybrid and electric vehicles expected to reach 8.3% of new vehicles by the end of 2020 and climb to 18% by 2025, according to the SEMA Future Trends Report for 2018.
With the increasing number of hybrids comes more opportunities for independent tire dealers and auto service centers to service them, especially in battery maintenance.
Simplifying and streamlining that process is the latest iteration of The Hybrid Shop (THS), a “bolt-on” specialty franchise providing the technology, tech support, training, data and marketing to help existing shops build out a robust hybrid and EV service niche. THS is under new ownership and “a new direction, a simplified business plan and supported by a global entity,” according to the company. That global entity is ITOCHU, a Japanese-based corporation that invests in a wide range of industries, mostly focused on solutions that “serve the greater good.” In this case THS was a strong fit as it relates to emissions-friendly future mobility solutions.
The all-new THS was introduced to media and prospective franchisees at a deep-dive event Feb. 18 in Torrance, California, followed by four days of training and education for the company’s franchise members. The focus of the training was to give dealers tools to build their business and teach technicians how to diagnose and repair (HEV/PHEV/EV), not just conditioning a battery pack.
The new THS program includes:
- Education for shop owners, technicians and service writers to ensure mastery of hybrid and EV diagnostics, safety, battery replacement/rebuilds and maintenance, including technical sales management and customer conversations;
- Batteries – remanufactured battery packs exclusively to its dealers, with a written three-year warranty. Processed battery module selection is based on several parameters done by an algorithm. The engineers at THS are currently working on replacement battery packs with higher capacity, plug-in conversion kits and other cutting-edge products, on-board electronic components, tools and more;
- Tech support, including a proprietary diagnostic tablet to support data-driven analysis and warranty support on replacement cores;
- THS branding and marketing;
- Exclusive products and technology;
- Protected territories;
- Access to the full network of expertise and support;
- Improved pricing.
The new business model is a sharp deviation from its historical approach – from the advancements in THS equipment to the technology to the support for its dealers to the vision of the organization moving forward.
Much of the change falls on the shoulders of CEO and Chief Technical Officer Martin Kruszelnicki, an ASE-master technician and former owner of 405 Auto in Santa Monica. He’s also a franchisee with a strong family history in the battery remanufacturing and diagnostic equipment space in Europe. In 2012 as a technician/owner, Kruszelnicki developed modifications to the original THS equipment offering, which were quickly met with strong objections from the former THS leader. Years later, his vision and engineering innovations regarding HEV/EV service and maintenance have helped revitalize the once-struggling brand.
A supporting cast of EV and HEV rock stars surround Kruszelnicki within the new THS organization. Among them is Mark Saxonberg, a lead technical consultant for THS and former ASE Master Technician who spent 28 years with Toyota, including heading up the company’s alternative fuel and environmental program. He also serves as the current chairman of National Automotive Service Task Force (NASTF) and is a child of the tire business (the Al Sax Tire Co. outside of Chicago). Helping build the business is former Hybrid Shop partner and tire industry veteran Dave Crawford, serving as chief operations officer. Tom Gage, the current CEO of EVGrid and pioneer in the EV space, is also involved with the strategic direction of the THS organization and its technology. Gage is the former CEO of AC Propulsion, the company responsible for the prototype that inspired the Tesla and the person who initially connected Tesla co-founder engineer Martin Eberhart with Elon Musk.
Anticipating the combined “revolution and evolution” taking place within the automotive service space, THS is also looking to the future in the creation of next-gen solutions that extend beyond the service or replacement of hybrid and EV batteries. Company leaders are currently developing a system for predictive maintenance based on data, partnering with Preteckt, which uses big data and machine learning to predict vehicle service needs.
The company is looking to grow its dealer network “significantly.” Protected territories will be in writing and based on the number of hybrid vehicles registered in each area’s car parc. With the growing number of hybrid and electric vehicles, Crawford sees it as an opportunity whose time has finally come.
“For tire dealers, they desperately need something today to help differentiate themselves from the competition. As all those guys like Discount Tire, Mavis and others all get bigger and bigger, where does that leave [the smaller independents]? They’re getting squeezed out on the profit side. Tires are becoming a commodity, so as a tire dealer today, you have to branch into the service side. When I look at SEMA projection, that 18% of all new vehicles produced in 2025 will be hybrid, do you want to not service 18% of the market? So do you want to miss out on 18 to 20% of cars because you can’t work on them? It’s what separates them. If they’re the one people come to when they have a problem, [they should] want people to see them as being on the cutting edge, the bleeding edge, of the industry.
“As the saying goes, the first in wins. Whoever gets there first in any category and positions around it, then everybody else has to play catch up. [HEV/EV] is where the market is going, where the growth is going,” Crawford said.
The THS team will be at the Vision Hi-Tech Training & Expo in Kansas City this weekend, Booth 837.
For more information, check out thehybridshop.com.