General Motors is making big moves in the all-electric vehicle segment, announcing plans to introduce 30 new EV models globally by 2025, two-third of which will be sold in North America. Cadillac will be at the forefront of the EV deluge, with battery-driven luxury vehicles like the Cadillac Lyriq leading GM’s new EV charge. However, some GM dealers are reluctant to take the plunge, electing instead to dump the Cadillac brand over investing to accommodate the new EV models.
In a recent article, the Wall Street Journal reports that roughly 150 GM dealers will drop the Cadillac brand to avoid costly upgrades designed to support the sale of all-electric vehicles.
As GM Authority covered previously, the nearly 900 Cadillac dealers located in the U.S. were notified recently that a $200,000 investment was required to prep for the arrival of new EV products. The investment would be used for new tooling, employee training, and the installation of EV charging stations.
Alternatively, Cadillac dealers were offered a buyout ranging between $300,000 and over $1 million to exit the brand.
Now, citing “people familiar with the effort,” the Wall Street Journal reports that roughly 17 percent of the GM dealers agreed to the buyout that would end their franchise agreement with Cadillac. Some of the GM dealers were uncertain of the automaker’s turn towards all-electric vehicles, pointing to relatively low adoption rates among U.S. buyers.
“The future dealer requirements are a logical and necessary next step on our path towards electrification,” said Cadillac global brand chief Rory Harvey in an interview. Harvey added that those GM dealers reluctant to make the new investment would receive fair compensation.
General Motors has set aside $27 billion in investments for new all-electric vehicle technology and autonomous vehicle technology through 2025. The automaker plans to allocate more than half of its capital spending and product development team towards EV and AV programs.