How electric vehicles are transforming auto service and revenue models
A. Krivonosov
Learn how EVs reduce service revenue, prompting automakers to use extended warranties and new paid services to adapt in the evolving auto industry.
The shift to electric vehicles is reshaping the auto industry's economics more profoundly than it first appears. In countries with high electric vehicle sales, like Norway, service networks are seeing significant revenue declines. EVs require fewer mechanical operations, which directly cuts into dealer and importer profits. European companies report that visits from EV owners bring service centers nearly half the revenue compared to internal combustion engine vehicles.
To counter this trend, automakers are changing their customer engagement strategies. Asian brands are leading this approach most actively. Programs built around extended warranties—contingent on regular visits to authorized service centers—are becoming key tools for retaining owners. In Europe, these schemes are already showing noticeable growth in after-sales income. The argument that manufacturers are willing to offer warranties up to 15 years builds additional trust and motivates customers to stay within the dealer network.
Chinese companies entering the European market offer extensive warranty commitments primarily to boost brand recognition and ease consumer concerns. Some European brands are adopting similar tactics, aiming to offset image problems linked to previous engine generations.
The industry is rapidly restructuring. New paid services are emerging, including digital subscriptions, charging solutions, and used EV maintenance offerings. The move to subscription models for feature access has already become part of some manufacturers' strategies. All this is creating a new revenue architecture designed to replace traditional service in a world with a growing share of electric vehicles.
