They have no choice but to invest in EV upgrades.
Upgrading dealership facilities to accommodate the mechanical and service needs of all-electric vehicles is a pricey investment. As we recently reported, Cadillac dealers were given a choice: either upgrade or take a buyout offer. The buyouts ranged anywhere from $300,000 to $1 million compared to the EV investment cost of up to $200,000. Out of the 880 dealers nationwide, roughly 150 opted out, meaning they are giving up their brand franchise entirely.
GMC dealers will be given no such offer, according to Automotive News. "We will not be going down a similar strategy as Cadillac," said Duncan Aldred, vice president of global Buick and GMC, in reference to those buyouts. So far, about half of those dealers have so far chosen to upgrade their facilities to accommodate the GMC Hummer EV.
The First Edition models are not due to arrive until next fall, but additional and less expensive trims will continue to go on sale through 2024. GMC dealers who want to sell the new truck must also sign an optional participation agreement. For the next two years, if not longer, GMC plans to allocate Hummer EV inventory based on customer orders and will encourage standardized pricing to hopefully avoid dealer markups. Some dealers, however, have a problem with this.
GMC's EV agreement with dealers gives the factory greater control of the digital retailing process from the get-go. Customers' $100 deposits go to the automaker, not the dealers and, as per the contract, GMC can take "any other reasonable, necessary steps" to fulfill reservations.
Dealers will also not be provided with customer data for anything other than the Hummer transaction and that information can only be used to complete the buying process. This angers dealers because they are not allowed to contact these customers to promote future sales promotions or even service updates. GMC wants sole control while dealers are seemingly just the go-between. Hummer EV buyers are likely not regular GMC customers and they're used to a different overall buying experience; GM recognizes it needs to properly accommodate them.
In the meantime, the Hummer has begun validation testing and will soon be heading to northern Michigan for brutal winter testing.