GM is offering $300,000 – $500,000 to Cadillac dealers to walk away if they are not interested in selling EVs.
With this latest Automotive News report, GM is evidently telling Cadillac dealers to either take the cash and drop the brand from their stores, or bite the bullet and commit to selling EVs in the near future. There are a lot of Cadillac dealerships (among others) that are resistant to selling EVs. Recently, GM announced that they are accelerating the production of the Cadillac Lyriq EV luxury vehicle. Last week, CEO Mary Barra explained GM’s plan to speed up the transition to EVs to investors, and laid out the company’s $27 billion to bring more battery-powered vehicles to market.
In that, though, some dealers are skeptical of the decision to make Cadillac a pure EV brand. With it, they say, the business case is weaker for those who may want a Cadillac, but don’t want to jump on the electric bandwagon.
GM’s ramping up to launch the first Cadillac EV, but not all dealers are on board.
As automakers transition over to EVs, dealerships will have to adapt. Those working under several manufacturers, not just GM, have shown hesitation toward electric sales, for a variety of reasons. They require a completely different skillset for sales people, and there’s concern over service and parts. Considering how little dealerships stand to make on maintenance compared to gasoline or diesel-powered vehicles, some dealers argue they stand to lose out in the long run.
In order to sell more boutique-like, expensive EVs, fewer Cadillac dealers may be beneficial. This is not the first time GM worked to thin out dealerships. With the estimate that by 2030, Cadillac may no longer sell any vehicles with internal combustion engine, this could end up as a win-win situation. Dealers that can make a feasible case to sell Cadillac EVs in supportive regions can do so. Those who argue they stand to lose could take the money to prop up short-term losses, while reworking their business model away from Cadillac’s pure-EV push.
In that push, GM is aiming Cadillac as a direct competitor to Tesla. The rest of the GM family has already begun the conversion to some electric vehicles. Chevrolet will soon have two versions of the Bolt and an electric pickup. Buick has EV crossovers coming soon. GMC just unveiled the GMC Hummer EV pickup, and it also has more EV products coming. For the time being, though, those brands will still offer internal combustion as an option, leaving dealers with more wiggle room to adjust.