Update: Cadillac Will Substantially Cut Its Dealer Network As Brand Shifts Toward EVs

GM is still negotiating with some dealers who prefer not to invest in selling and servicing EVs

Update: Cadillac Will Substantially Cut Its Dealer Network As Brand Shifts Toward EVs
Cadillac dealers are rarer these days, but there may be fewer still in the coming years as it morphs into a pure-electric brand. (Photos: General Motors)

Within the next decade, Cadillac promises to be a drastically different brand than what we have right now. From the Lyriq crossover forward, GM is positioning its luxury arm into a pure electric affair, leaving dealers with a decision to make. Through the end of November, the automaker offered to buy out dealers who were unwilling to invest in the infrastructure to sell and service EVs through their franchises. According to a recent Carscoops report, nearly one-fifth of current Cadillac dealers will give up their franchise by next year.

Cadillac dealers underperforming luxury rivals

Depending on where your Cadillac dealer is located, there could be significant economic incentive to take the buyout. That report notes a larger problem endemic to the brand: Dealers aren’t shifting as many cars as their competitors. The average BMW or Mercedes-Benz dealer, for example, can sell upward of 1,000 cars annually. By contrast, the average Cadillac dealer moves fewer than 200 units. Of the 882 dealers in business this year, those either underperforming as a whole or not in a strong EV market could negotiate a payout up $500,000 from GM to drop the brand from its franchise.

“They are so over-dealered compared to their competitors that it’s going to take far more than 20 percent of the stores to close for the remaining Cadillac dealers to become more competitive with their luxury peers,” Haig Partners president Alan Haig told Automotive News earlier this month. Mind you, the luxury brand already shed nearly half its dealer network from a high point of 1,400 dealers in 2008, before GM’s bankruptcy.

Even before they go all-electric, Cadillac will still take one more crack at gas-powered performance vehicles. We should see the CT4 and CT5-V “Blackwing” models emerge next year.