mobile-menu-icon
GM Authority

Dealers Question Required Upgrades For General Motors Electric Vehicles

Some General Motors dealers are pushing back against a new agreement that would require them to make costly investments in preparation for the arrival of future electric vehicles like the Cadillac Lyriq and GMC Hummer EV.

The agreement directs dealers to spend between $120,000 to $200,000 to prepare for the automaker’s incoming flux of new EVs, with various investments required for both sales and service.

According to Automotive News, some rural GM dealers believe they won’t see a return on their investments, as their customers have shown little interest in electric vehicles. Only a third of dealerships in Virginia signed the contract, the publication reports, and GM has also seen pushback in North Carolina and Florida. Some dealers have no problem with selling electric vehicles or making additional investments to do so, AN also said, but see no need for a separate agreement just because a new model is electric.

“They do not believe that all of a sudden when the factory comes out with a new car or a new line of cars that they should have to sign a separate agreement,” North Carolina Automotive Dealer Association President, Bob Glaser, explained. “If I’m a Buick dealer, I should be able to sell all Buicks.”

GM North America president Steve Carlisle told AN the investments were “a necessary step that we need to take to achieve our vision of an electrified future.” He also said that as GM reveals new EVs, like the Lyriq, Hummer EV and next-generation Chevrolet Bolt EV, consumers will become familiarized with the models and EV demand will increase.

“As we roll out products and that adoption curve kicks in, the volume will grow,” said Carlisle. “We certainly expect that there will be a return on that. That’s our mutual future.”

{{ title }}

This poll will begin soon.

This poll has concluded.

Subscribe to GM Authority for more General Motors dealer news, General Motors electric vehicle news and around-the-clock General Motors news coverage.

Sam loves to write and has a passion for auto racing, karting and performance driving of all types.

Subscribe to GM Authority

For around-the-clock GM news coverage

We'll send you one email per day with the latest GM news. It's totally free.

Comments

  1. The truth is they will need this equipment to deal with these and future product.

    GM also needs to lose some dealers as they just have too many dealers in most markets.

    The strong will survive and the weak will sell out.

    The transition to electric vehicles is an expensive investment from the mpg to the dealer tand even the customer. There is no free ride here.

    Reply
  2. Everyone can keep making fun of me but I still hold true that it will be easier for Startups to sell EV’s around the World than for the Legacy Auto Makers to make the extremely difficult shift to EV’s.
    One of their biggest issues will be the Dealer Network that absolutely doesn’t want to sell them at all.
    I have been from Chevy Dealers to Porsche Dealers and every single one has tried talking the person that is looking for the EV vehicle to get an ICE vehicle. The lies (not all Dealers but majority) they tell potential Customers about EV’s is downright insane.
    I read an article that VW in Europe is guaranteeing their Dealers certain amount of Cash upfront to sell their EV’s.
    This is why some decent size Legacy Auto Makers will not make it during the EV shift.
    If I was a Legacy Auto Maker I would be spending millions getting Polititions to get rid of these insane Dealer Laws that are completely archaic.
    The Millennials and whatever the younger Generation is called will just order cars from their Cell Phones going forward.
    I mean it took me five minutes on my iPhone to order my Tesla. And then a couple clicks here and there throughout the three weeks it took to get my car. It was so easy I honestly could’t believe it was real.
    Legacy Auto Makers need to figure out some kind of compromise in the Future. it will become a Huge issue going forward.
    Dealers need to make money on service so why should they try and sell EV’s?
    This lack push by the Dealers and the amount of R&D that Legacy Auto Makers are now having to spend to make the Shift will give Startup Companies and even worse Chinese Companies to come in here and sell direct.

    Reply
  3. Think about it from the dealers’ perspective. So far, Cadillac has had two EVs (ELR and CT6 PHEV). Neither sold well at all. The Lyriq might steal some sales from jaguar, but it isn’t shaping up to be a Tesla killer. So, invest more money to be allowed to buy cars that will be difficult to sell and have little after sales profit from ongoing maintenance or maintain the status quo and sell Escalades and XT6s. Cadillac should be aiming to put Elon out of business – not tepidly pretending to get into electric vehicles. We need a CT4-eV that runs with the Model 3 performance, a CT5-eV that runs with the Model S plaid, an XT5-eV that runs with the Model X, and an XT6-eV that FINALLY beats Tesla to the punch. The fact that we have none of this tells me that the dealers are just being asked to pretend that Cadillac cares about EVs. Once Tesla has the cybertruck, does anyone doubt they will go after the Escalade? And don’t get me started on the folly of the Celestiq (and I’m an Allante owner)…

    Reply
    1. It is a little different this time. GM is bringing full electric this time and in much greater numbers.

      They could let dealers slide on the Volt and Bolt as most were only sold in California and some large metro areas.

      This transition is not unlike people going from over the air broad cast to digital. Not easy not cheap and not with out some investment pains but unavoidable.

      Especially at Cadillac dealers where they hav3 to get the service and dealer experience down right the first time. They can’t bluff their way through this One.

      GM has commuted to this so they are all in. Dealers hav3 to be on the same page.

      GM has a chance to show up Tesla as they can have a dealer experience in person and local support nearly everywhere.

      This could be like the Apple Stores. The availability and experience along with the service beats out many rivals where you have to sit on hold waiting for a tech or sending your unit in for a minor repair.

      These new cars can not be sold just like any cars but as tech equipment. People 2ill need guidance when they make the change as this is not the same game.

      Reply
  4. 2 Play U must Pay

    Reply
  5. Dealers always balk at factory mandated investments.

    Perhaps dealers that don’t make the necessary investments should not be allowed to sell the Electric Cadillacs? Perhaps this will have the effect of culling the number of dealers. More sales going through fewer dealers makes those dealers more profitable. The owners are far more likely to make their stores nicer. This is why dealers for Cadillacs competitors are often so nice. Mercedes sells far more vehicles through far fewer dealers than Cadillac. Where I live, there are 2 Mercedes dealers and 5 Cadillac dealers. Only 2 of those are Cadillac only. The others are dualed with lesser brands. Only one of them is very new or very nice.

    Reply
  6. I find it hard to side with MOST dealerships who would rather live on the low hanging fruit than expend time, money and effort to ensure their future. Their efforts to sell the Volt and Bolt was/is pathetic, and GM was powerless to incentivize the effort. To one extent or another electric cars will be a factor, and the long lead time makes preparing now a good move. I view this move by GM as a way to put sales of the Traditional lineup in play if the dealers choose to ignore the electric market, and insure the dealers have electric skin in the game by forcing an investment in the technology’s future. The only other option they have is to debrand the new Electric cars, and sell them at new dealerships that have to open up with a turn key electric shop. Until the dealerships can look beyond 6 to 12 months, the legacy manufacturers have a problem.

    Reply
  7. I also question the specific requirements for EV vehicles.

    After all GM in the past has required substantial investments such as Level II charging, etc. (which some of the larger dealers around here ignored by the way) for the Cadillac ELR and, then much later, the CT6-plug-in. Then, with the ELR only being actually manufactured 12 months ( 9 in 2014 and 3 in 2016), Great Brain and EV-Hater “EVs are stupid – people should drive Clean Diesels!” Johann De Nysschen cancelled the car prematurely. (Ask VW how the fines they paid helped their profitability.) Cadillac Dealers were left with NOTHING to sell for quite some time. Then, the CT6 – plug in ; a much more poorly designed effort than the ELR had extremely limited roll out, and much poorer sales. With the BOLT EV – they have instituted the really nonsensical requirement of a 25 kw horribly unreliable Bosch fast charger, when simple and low cost portable diagnostic products would provide all the functionality needed… One only needs to prove the car works at a fast charger, not to actually have one at the dealership.

    As just a loyal GM customer on my 5th GM plug-in, it seems that Executives want ALL DEALERS to be all-in, and then they cancel the product. No more Volts (Generation 1 nor 2), ELRs, CT6-Plug-ins, and nationwide, there never were any Spark EVs. And this while only selling 1 low cost, relatively low volume chevy, with the newest upcoming ev product – the Bolt EUV to be essentially little different from the Bolt EV. No wonder dealers are objecting.

    So now we have a company that has discontinued 4 or 5 different product lines of plug ins, while dealers have to invest heavily into the NEXT group of ‘to be discontinued’ models.

    Reply
  8. Dealers make a lot of their money on after sales service. EV requires less after sales service. Not as many moving parts means less repairs and less money to be made for the dealer.

    Reply
  9. I think the dealerships should have the right to choose if they want to update for EV’s. As mentioned in an above post two Mercedes dealerships and five Cadillac, in a local area. Prospective buyers if they want the product bad enough they will go to the dealer that has updated to the new program. A win-win for the dealership to decides to upgrade. At this stage of the game. It is a roll of the dice. How this whole situation is going to play out.IMHO I think they should have continued perfecting the hybrid vehicle. So the population has a choice of gas, diesel electric for extended range vehicles.

    Reply
  10. Promises, promises. GM direction can change on a whim, or one bad quarter. There is not much faith there. How about GM invests in 450kw charging stations at all dealers themselves? Give a little to get a little.

    Reply
  11. Response to Tom Landry II:

    Even some of the larger Cadillac Dealerships have only 75 kw of capacity for the entire Dealership Complex. How can anyone sober reasonably require SIX TIMES the infrastructure just for one vehicle?

    For servicing, all that is necessary is to verify the charging facility works. Why is the FASTEST IN THE WORLD charging facility required at a dealership?

    A totally analogous desire among Gasoline – powered vehicle drivers would be a super-duper oil refinery in the back of the service bay. I’ve never bought gasoline at a dealership, and some of the dealers around me would use the included ‘occasional use cord’ included with the car, to keep it fully charged for test drives, back when they were selling ELR’s and CT-6’plug-ins.

    While those vehicles segregated for Rental Service may require a bit extra in the way of charging facilities – and in theory should never be required since the customer is required to return the vehicle at the same state of charge as when rented – the fact that the rental customer is charged for this the same way that a gasoline vehicle customer pays a premium for not having adequate gasoline upon Rental Return – in this way the dealer’s extra investment in a charging facility becomes a profit center for the dealership – that is a different thing.

    Reply
  12. hanks for putting together such a comprehensive list! You rock some seriously awesome social media socks! {:>) However, Domain Authority (Moz) is a parameter to check the ranking in Google. If you want to increase your DA at very low cost, please check out on profile link.

    Reply

Leave a comment

Cancel