Some Smart car dealers are considering stopping sales due to the brand going all-electric

Earlier this year, Daimler announced that it is converting the Smart brand to all-electric in North America and discontinuing gas-powered Smart cars.

By September, Canadian and American dealerships will stop receiving gas-powered Smart cars and the 2017 electric smart model year cars will become the only options.

We now learn that the move is facing some opposition with its dealer network as Smart car dealers are now considering stopping sales of the vehicles and going service-only.

While we were excited by the strong move toward electrification from Daimler, it’s not unimaginable why they would have doubts about the change. Car dealers have often been resistant to selling electric vehicles, but we have to consider the vehicles they have to sell in this case.

Last month,  Daimler confirmed pricing of the 2017 Smart Fortwo electric drive and it received a small price reduction to a starting MSRP of $23,800. The 4-seat option is still $28,000.

It’s hard to gauge the market for this type of vehicles. Considering the gas-powered version starts at ~$15,000, the electric version is only competitive after EV incentives- especially in states with a separate incentive on top of the $7,500 federal tax credit.

Ken Schnitzer, chairman of the Mercedes-Benz Dealer Board and owner of two Smart outlets in Texas, told Automotive News:

“Electric Smart vehicles make sense in certain markets, but don’t make as much sense in other markets. So it might make some sense for some dealers to become service-only dealers.”

Mercedes-Benz USA CEO Dietmar Exler admitted that some dealers might have to stop carrying Smart cars:

“It might not make sense for some of the dealers, depending on where they are in the country, to continue. That’s something we’re discussing with our dealers. But for electric-important markets, I have not had one conversation with a dealer who would not want to continue.”

The dealers will have until September to decide.

While it’s disappointing that the move to electric could result in a significant reduction of the Smart brand’s presence in North America, Daimler is still moving forward into its broader push toward electrification with the Mercedes-Benz brand. The company recently secured manufacturing capacity to produce compact electric vehicles in Germany and unveiled its new battery factory.

The German automaker recently announced the acceleration of its electric car plans by 3 years and that they will spend $11 billion on 10 models by 2022.