How Costco Could Move The Needle On EV Sales In The US
The naysayers have been busy issuing doom-and-gloom reports on the state of EV sales, but meanwhile EV makers have a secret weapon up their sleeves, and its name is Costco. With 50 million members in the US and a solid reputation for trustworthiness, the warehouse discount operator has already carved out a hefty slice of the US auto market, and it is offering members-only incentives for EV buyers, too.
EV Sales Made Easy, The Costco Way
Costco is well known for selling bulk groceries, household goods, clothing, and many other items to its members, who pay a modest annual fee to access bulk discounts.
Don’t get too excited about the EV sales thing just yet. You can’t get a bulk discount on an electric vehicle with your Costco member card. However, the company does offer incentives to members through its Costco Auto Program. Currently, for example, Costco is offering eligible members a $1,000 incentive on the purchase of a 2024 Chevy Equinox EV.
Costco Auto doesn’t sell cars directly, but it does facilitate “haggle-free” sales through authorized dealers and automakers. That’s a particularly helpful service in the EV sales field, where a trusted Costco representative can help prospective buyers sort through any available state and federal EV incentives, and any other incentives that apply, in addition to any incentive offered through Costco Auto.
CNBC reporter Michael Wayland took a deep dive into the Costco Auto program on June 7, in which he noted that an average of 500,000 vehicles per year have been sold through the program for the past five years. That’s about 3% of all vehicles sold in the US. Three percent may sound like small potatoes, but it puts Costco on a higher plane than other publicly traded dealer groups in the US.
GM Hearts Costco For EV Sales
EV sales make up just a fraction of the total number of vehicles that pass through the Costco Auto Program, but it is a significant fraction. Wayland reports that last year about 7% of the requests fielded through Costco Auto were EV-related.
Though not all of those inquiries may have results in a sale, the figure of 7% does coincide with the national average of plug-in EV sales for 2023, which Kelly Blue Book estimates at 7.6% of all new vehicles sold in the US.
So far, a limited number of EV makers have partnered with Costco on EV sales, with Polestar and Volvo represented alongside GM. CleanTechnica readers won’t be surprised to see General Motors on the shortlist, since the company has previously leased its Chevy Bolt EV through Costco Auto. Wayland also notes that GM has been a US Costco Auto partner since 2011, indicating that EV sales are the next step in a solid, long-running relationship.
Currently, the $1,000 Costco Auto incentive applies to the Chevy Blazer and Cadillac Lyriq EVs, along with the Equinox. If you’re wondering why not GM’s more affordably-priced Chevy Bolt, that’s a good question.
Early last year GM announced that it was discontinuing the Bolt, only to pop a 180 just a few months later and announce that a new iteration of the popular EV would be in the works.
Last spring we noted that one motive behind the Bolt revival is its role as a “conquest sale” vehicle, leading satisfied customers to make their next purchase another Chevy EV (see more Bolt EV coverage here).
If and when those new Chevy Bolts roll off the assembly line, we’re guessing GM will add them to the Costco Auto program. After all, why not? Costco is all about the bargains, and GM has been laying the groundwork to promote the new Bolt as the most affordable EV in the US.
EV Charging Stations To Boost EV Sales
Affordable or not, one obstacle to EV sales is the lack of access, or perceived inconvenience, of public charging stations. Public or workplace charging stations are a necessity for drivers who can’t charge up at home, so no access equals no EV.
Like other retailers, Costco is in a good position to install charging stations at its locations, though it has been exercising caution in that area after an unsatisfactory experience with the technology in the early 2000’s.
Just last year Costco reportedly said it had no plans to try that again. Nevertheless, the company’s Q4 2023 earnings call reportedly included a mention that the company was in fact testing EV charging stations at some of its stores, though without promoting them.
We’re waiting to see how that pans out. If Costco decides to expand on the experiment, that could help motivate customer interest in buying an EV.
It’s also worth noting that, while you can’t shop the aisles of Costco for an EV directly, you can pick up a JuiceBox or Wallbox Pulsar home EV charging station there.
Meanwhile, Costco Is Electrifying Itself
In a behind-the-curtain move, Costco is also among the US businesses supporting EV sales through fleet electrification.
The latest news in that area involves the Seattle firm Trinity Structures, which bills itself as Costco’s “electrification partner.”
Trinity specializes in something it calls “electrified structures” rather than mere charging stations. In January, Trinity announced the commissioning of the first off-grid, solar-powered electrified structures for Costco’s fleet, located at the company’s distribution center in Mira Loma, California.
One selling point Trinity emphasizes is speedy deployment, partly due to eliminating the need for a grid connection. According to the company, the Mira Loma installation, from design to deployment, was accomplished in just four months. Trinity cites 24 months as a more typical timespan.
In addition to charging Costco’s EV fleet, solar power from the facility can also be used for backup power.
If Costco is happy with Trinity’s new electrified structure, perhaps it will make the clean kilowatts available to its customers, too. For now, though, the company is focusing on converting its diesel truck fleet to alternative fuels.
The company’s Global Energy Strategy also goes beyond the company’s fleet vehicles to encompass operations at its roster of 850 warehouses globally. The company is targeting 2030 as the goalpost for a 39% drop in Scope 1 and 2 emissions, meaning the pollution related to its own operations and those of its energy providers.
Tackling Scope 3 supply chain emissions is a whole ‘nother kettle of fish. The company lists we have a Scope 3 Action Plan that focuses on supplier energy, sustainable agriculture and livestock, energy-efficient products, and sustainable packaging among its areas of focus.
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Photo (cropped): Costco members can get a $1,000 incentive for selected GM EVs through the company’s Costco Auto Program, in addition to other state and federal incentives (courtesy of GM).
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