Fortune favors the bold.
Cadillac issued an ultimatum to its dealerships late last year: either invest at least $200,000 in necessary EV-related upgrades for the new lineup or close up shop. In other words, Cadillac's future is all-electric and it needs its franchised dealers to be onboard. Out of the 880 Cadillac stores, about 150 decided to walk by taking a buyout. Those that have remained, however, are bullish about the brand's future.
Speaking to Automotive News, new Cadillac stores are currently being established in core cities like Beverly Hills, California and Manhattan, New York. The former hasn't had a dedicated Cadillac dealer since the 1980s. Large and wealthy dealership groups have been acquiring Cadillac stores over the past year in anticipation of the new models like the 2023 Lyriq and the upcoming fully electric Escalade, due mid-decade.
Dealers who opted for buyouts did so for a number of reasons, among them the belief that local customers had no interest in EVs. This was especially true in more rural areas. Others simply didn't want to invest a couple of hundred grand in a technology they don't believe in. Dealers who are going all-in, however, see the huge potential.
"These are all 20-year decisions," said one dealer vice president. "It is very satisfying to know that you have partners [who] can see 20, 30 years down the road, and they're putting their money where their mouths are. They're fully invested into the brand, invested into Cadillac." The money these dealers are investing is being put towards EV chargers, employee training, and other necessary tooling.
Their decision is already beginning to pay off as customers are increasingly asking questions about EVs and when the stunning Lyriq will go on sale. "I can't go places where people find out I am the Cadillac dealer," said the future Beverly Hills dealer owner. Another dealer group is building a $20 million dealership in Arlington, Texas as it anticipates a very strong EV response. Above all, these dealers have full confidence in Cadillac's senior management's decisions.
"Is electric going to sell? Absolutely it will. Will it be 100 percent of the portfolio? I don't think so," another dealer owner said. "But if the consumers demand it, then [Cadillac is] prepared to do it." Attitudes like this is exactly what Cadillac needs to succeed.