How Electrification Is Reshaping the Automotive Aftermarket: Challenges, Opportunities, and Action Steps

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The Electrification Shift: A New Era for the Aftermarket

The automotive industry is experiencing a historic transformation as electrification accelerates worldwide, reshaping nearly every aspect of the aftermarket. As electric vehicles (EVs) and hybrids gain market share, businesses across the aftermarket-from parts distributors to service providers-must adapt their strategies to remain relevant and profitable. This article explores the profound impacts of electrification on aftermarket demand, service models, business opportunities, and provides actionable steps for industry stakeholders seeking to thrive in this evolving landscape.

Changing Vehicle Components: Fewer Moving Parts, Different Needs

Traditional internal combustion engine (ICE) vehicles are complex machines with hundreds of moving parts, requiring frequent maintenance and a steady demand for replacement components. EVs, by contrast, feature much simpler drivetrains, typically with fewer than 20 moving parts. This simplicity means there are fewer mechanical failures and less frequent need for common ICE-related aftermarket parts, such as spark plugs, oil filters, and exhaust systems. As a result, businesses focused solely on ICE components are likely to face declining demand and revenue in the coming years [1] , [2] .

However, electrification is not eliminating aftermarket opportunities-it is transforming them. EVs rely heavily on advanced battery systems, power electronics, and software, all of which require specialized diagnostics, repair, and replacement services. For example, high-voltage battery packs, valued at tens of thousands of dollars, create a growing market for remanufacturing, repairs, and recycling-particularly as vehicles age and battery degradation becomes a concern [4] . Companies that invest in the skills and equipment needed to service these components can tap into new, high-value revenue streams.

Digitalization and Connectivity: The Rise of Software-Based Services

Modern EVs are as much about software as hardware. The proliferation of sensors, electronic control units (ECUs), and onboard connectivity is driving a shift toward advanced diagnostics and software management in the aftermarket. Over-the-air (OTA) software updates-previously the domain of the dealership-are now routine, enabling everything from performance enhancements to cybersecurity patches [3] .

This digitalization opens opportunities for aftermarket businesses to offer specialized software services, such as system updates, feature unlocks, and cybersecurity monitoring. It also enables predictive and prescriptive maintenance, using real-time data to identify issues before they become critical. Businesses can leverage connectivity to build new service models, such as remote diagnostics, subscription-based maintenance plans, and data-driven customer engagement strategies. To implement these offerings, consider the following steps:

Invest in advanced diagnostic equipment and software platforms compatible with EV architectures.
Partner with technology providers specializing in automotive cybersecurity and OTA solutions.
Train technicians in the latest EV and software service protocols.

Spare Parts Demand: What’s Declining and What’s Growing?

The aftermarket spare parts landscape is changing. Demand for traditional wear-and-tear parts-like engine oil, filters, and exhaust systems-will decline as EVs proliferate. However, some components remain essential:

Brakes: While regenerative braking reduces wear, brake systems still require periodic inspection and replacement.
Suspension and Tires: These components face similar wear patterns in ICE and EV vehicles and will continue to drive aftermarket demand.
HVAC, pumps, and fans: EVs require advanced heating and cooling systems for both the cabin and battery packs, creating new service needs [4] .
Battery systems: As vehicle batteries age, opportunities for diagnostics, repairs, repurposing, and recycling expand. Companies specializing in battery health assessment and refurbishment stand to benefit.

Hybrid powertrains, which combine ICE and electric components, introduce added complexity and an extended product lifecycle for ICE-specific parts. Research shows that the average lifespan of ICE vehicles is now up to 13 years, compared to a previous average of 10 years, providing a prolonged-though eventually declining-market for traditional aftermarket goods [2] .

Service Models: Fewer Visits, More Specialization

Consumers with EVs typically require fewer service visits than those with ICE vehicles, as routine maintenance needs are reduced. However, the services they do require are more specialized, often involving high-voltage systems or advanced electronics. This trend is driving a shift towards more maintenance being performed by OEM dealerships or certified specialists, as independent shops must invest in training and equipment to remain competitive [3] .

To adapt, aftermarket businesses can:

Develop partnerships with OEMs or technology providers for access to proprietary diagnostic tools.
Pursue certifications in EV maintenance and high-voltage safety.
Offer value-added services, such as extended warranties and tailored maintenance contracts, leveraging vehicle connectivity data for proactive engagement.

For those seeking specialized training, you can contact national automotive training organizations, local community colleges, or industry associations. Search for “EV technician certification programs” or contact the National Institute for Automotive Service Excellence (ASE) for guidance on available courses and credentialing pathways.

Remanufacturing and Recycling: New Business Frontiers

EV battery packs, power electronics, and electric drive systems represent high-value, complex components that create significant opportunities for aftermarket remanufacturing and recycling. For example, a battery pack that costs $20,000 new might be rebuilt for several thousand dollars, creating a cost-effective alternative for owners of older EVs [4] .

To access opportunities in this space:

Explore partnerships with certified battery recycling firms.
Invest in R&D for second-life battery applications, such as energy storage systems.
Monitor regulatory developments regarding battery disposal and recycling. For the latest regulations, visit the U.S. Environmental Protection Agency (EPA) website and search for “EV battery recycling guidelines.”

Adapting Business Strategies: Actionable Steps for Aftermarket Enterprises

Aftermarket businesses need a proactive, multi-pronged approach to remain competitive:

Assess Product Portfolios: Review your current offerings and identify products at risk of obsolescence due to electrification. Diversify into EV-specific components and services.
Upskill Your Workforce: Ensure technicians are trained in high-voltage safety, battery diagnostics, and software-based services. Leverage training resources from local colleges, industry associations, and OEM programs.
Invest in Technology: Acquire advanced diagnostic tools and software platforms capable of interfacing with modern EV systems.
Build Strategic Partnerships: Collaborate with OEMs, technology firms, and recycling providers to expand your service and product reach.
Monitor Market Trends: Stay informed on the latest EV adoption forecasts and regulatory changes. Industry reports, such as the “2024 Joint EV Trends and Outlook Forecast” from the Auto Care Association, provide valuable insights. To access these, you can join the Auto Care Association for member access or purchase reports directly through their website [5] .

Overcoming Challenges: Barriers and Solutions

Adapting to electrification is not without hurdles. Key challenges include the need for significant investment in new equipment, the shortage of skilled EV technicians, and access to proprietary data locked by OEMs. Solutions include pursuing ongoing education, lobbying for open data access, and forming industry alliances to share best practices and pool resources. Engaging with industry associations can provide advocacy and networking opportunities to help navigate these transitions.

Alternative Pathways and Future Outlook

While the pace of EV adoption varies by region and market segment, the direction is clear: electrification will continue to reshape the aftermarket. Businesses that remain flexible, invest in skills and technology, and proactively seek out new opportunities will be best positioned to succeed. Alternative pathways include specializing in hybrid vehicle support, developing expertise in lightweight materials, or offering mobile EV service units to meet evolving customer expectations.

Getting Started: Practical Steps for Aftermarket Businesses

To begin your adaptation journey:

Conduct a comprehensive skills and equipment audit to identify gaps related to EV service.
Engage with training providers for technician upskilling in high-voltage and software diagnostics.
Join relevant industry associations for access to the latest research, advocacy, and business networking.
Monitor regulatory bodies such as the EPA for compliance requirements related to battery handling and recycling.
Stay informed about consumer sentiment and adjust service offerings to match emerging needs, such as subscription maintenance or data-driven customer engagement.

It’s possible to contact the Auto Care Association, local trade organizations, or your regional Small Business Development Center for guidance on accessing market research, technical training, and strategic advice tailored to the automotive aftermarket sector.