As Cadillac gears up to become a manufacturer of electric vehicles, it's reached a point where it needs to start preparing its dealer network for the change. This means lots of costly and mandatory upgrades to their facilities for franchised dealers unless GM gives them a way out of their franchise agreements.

According to a report published Friday by the Wall Street Journal, that's precisely what GM is doing. Specifically, GM is giving Cadillac dealers a choice between giving up their ability to sell any Cadillac and taking a buyout or investing hundreds of thousands of dollars into an uncertain future.

Currently, there are around 880 Cadillac dealers in the US, and based on WSJ's reporting, as many as 150 of them have taken GM's buyout for dollar figures ranging from around $300,000 to as much as $1 million. This makes sense since many of these dealers also sell other GM lines like Chevrolet, Buick and GMC, and their Cadillac business may only account for a very small part of their overall yearly sales.

"The future dealer requirements are a logical and necessary next step on our path towards electrification," said Rory Harvey, global brand chief for Cadillac, in a statement. "Those who aren't ready to make that commitment are getting fair compensation for exiting the brand."

The trepidation from the dealer network is understandable when you look at the changes in the auto industry as a result of the COVID-19 pandemic and with the public's relatively slow adoption of electric vehicles. Add in Cadillac's unproven record with EVs, and that leaves a lot of room for things to go wrong.

Cadillac expects its first production EV, the Lyriq SUV, to hit showrooms in late 2022.

https://www.cnet.com/roadshow/news/c...v-sales-lyriq/

 

I agree with the dealerships....and the public has been slow to adopt EVs for a reason. There is way too much emphasis on them today....and they are not the answer to everything.

 

Cadillac wants dealers to give up their dealerships, they have wanted to shrink their dealer footprint for years. I'm sure they did an analysis and calculated what percentage of dealers would accept a buyout based on what they offered. I would imagine most dealers taking the buyout are in smaller towns/rural areas where the electric infrastructure is not as robust and Cadillacs are sold alongside other makes and represent a small percentage of vehicles sold by the dealer.

Electric cars seem to appeal, in general, to a younger buyer. I have many, many coworkers in their 30s and early 40s who have EVs and love them. They even say they could never go back to gas, or dislike their spouse's gas vehicle. So many, in fact, that my company installed about 30 chargers in our parking lot (and this was a few years ago). I also have coworkers in their 20s who want nothing more than lower-priced EVs they can afford. Most older folks in my office don't care for them. I'm not saying this represents the population as a whole, it's just what I see.

 

It also would not surprise me if a fair number of those dealers that accepted a buyout would have done so no matter the circumstances.... I think there's nothing to see here in this story.

 

Nothing wrong w/ that move....Cuts down the Cad dealerships & doesn't just leave the current dealers hanging that don't want to go down that road.....

 

While I dont have insight into the numbers, I think dealers probably are being hinted at how operations are set to change with the intro of the EV hummer.
-one price
-little to zero customer -dealer interaction/they want dealers to act as delivery specialists only

Cadillac as it stands now does none of the above and some models on average have huge incentives needed to push them off the lot. Instead of adapting to a system that may or may not provide any long term gains better to close up shop and focus on the volume they get with the other brands.

 

Also, much lower maintenance schedules. EVs will render many dealers obsolete.

 

Didn't we hear this same story eight years ago with the Cadillac ELR? And how did that turn out for everyone? Can't blame the dealers...

 

Technology for EVs has advanced considerably since the days of the Volt and ELR, but I agree with you that trying to shove it down the throats of dealerships is a different matter.

I hope, though, that, for the sake of the dealership employees, this doesn't ultimately mean more upcoming unemployment. It's one thing for the aging dealership owners to retire and go play golf......quite another for the employees that have to feed their families every day and put a roof over their heads.

 

I can't blame the dealers either. With electric vehicles, it knocks out a good part of the market. I can only think of all the people like me that live in apartment complexes or similar that do not have a place to charge at night.

 

If EVs become more popular, apartment buildings will need to start adding charging stations in order to continue to attract residents. Before you were able to get high speed internet thru your cable co, the same thing happened with T1 internet access capability.

 

People scared of change. It's going to happen whether dealers like it or not.

 

Nobody will buy EV Cadillac.

Just like nobody is buying the new EVs from Volvo under their new Polestar brand.

Tesla is the only brand that has had any success in this niche.

 

You're putting the cart before the horse. Cadillac won't be able to sell EVs without dealerships. That's not a matter of being "scared" of change. It is a simple automotive fact. Not only that, but one cannot force people to buy what they don't want. So far, the only truly major successful BEV in the American market has been the Tesla Model 3, although other Teslas have also had lesser amounts of that success.

 

They have 880 dealers. 150 are taking the buyout. That leaves 730. Cadillac will have plenty of dealers to sell EVs through LOL.

FYI, Lexus has like 250 dealers. MB like 280. Cadillac has too many dealers like Jill pointed out, they have been looking to shrink them anyways.

Your logic here makes no sense. You rail against carmakers for cancelling sedans because customers don't want sedans, yet you say "you can't make people buy what they don't want" and rail against carmakers for making EVs.

People DO want EVs. Once you can charge an EV anywhere like you can fuel a gas car, and you can do is close to ask quickly, people will abandon gas cars in droves. Outside of the charging aspect EVs are really better at everything. Quieter, cleaner, cheaper to maintain, whats not to like? Once customers experience that and the range anxiety issue is rendered moot, watch and see.