Cadillac Dealers Have A $200,000 Decision To Make

Industry News / Comments

It all boils down to whether to sell electric vehicles.

Electrification is the future of the auto industry. General Motors reconfirmed this reality just the other day by announcing updated plans to launch 30 new electric vehicles by 2025 along with an increased $27 billion investment. The Cadillac Lyriq, due to arrive in early 2022, is just one of those new EVs. As a brand, Cadillac could even go all-electric by the end of the decade. As GM continues to heavily invest in its luxury brand, it is also requiring Cadillac dealerships to invest up to $200,000 for numerous EV-related upgrades, such as charging stations, new tools, and technician training for repairs and regular maintenance. Not all dealers are on board with this plan.

According to Automotive News, unless the necessary investments are made, they can no longer be Cadillac dealers, plain and simple.

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Sideward Vision
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GM is now offering buyouts between $300,000 and $500,000 for those who want out of the Cadillac business. This buyout range, however, is not official and was provided to the news outlet by undisclosed sources. Cadillac has declined to reveal the buyout figures and other related details. Dealers who do decide to close shop will be contractually obligated not to reveal those details.

It's important to know that dealers who aren't willing to make the EV switch can still sell Cadillacs through 2021 and even retain access to GM's used vehicle auction until the end of 2024. Some Cadillac dealers sell other GM brands, typically GMC, so they wouldn't be completely cut off from the hive.

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2022 GMC Hummer Dashboard

And therein lies another issue: the new GMC Hummer EV truck. Say a Cadillac-GMC dealership decides to drop Cadillac, will it also be allowed to sell the Hummer and the upcoming SUV version? They won't have things like charging stations on the premises, something GM will almost certainly take issue with.

Cadillac dealerships have known for around a year about GM's long-term commitment to EVs and those who haven't made a decision whether to stay or go don't have much time left to do so. GM has supposedly given them a November 30, 2020 deadline, less than one week from now.

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2022 GMC Hummer Top View
2022 GMC Hummer Side View
2022 GMC Hummer Open Hood
Source Credits: Automotive News

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