The GMC Hummer EV is one of the most exciting new vehicles on the market, reinventing the iconic Hummer nameplate as an all-new, all-electric off-road machine. Pricing for the GMC Hummer EV can easily eclipse the six-figure mark, such as with the range-topping Edition 1 trim level, but as GM Authority has learned, GMC dealers aren’t collecting much profit from the sale of the Hummer EV Edition 1 Pickup.
As it stands, the MSRP, Invoice, Employee, and Supplier price are all the same. The only dealership profit is in holdback, which has to be done perfectly and doesn’t always pay out. Holdback for the GMC Hummer EV is around $3,000, which isn’t nothing, but is more on the level of the GMC Acadia than what one may expect from the six-figure Hummer. In fact, it is not even on the level of profit for the GMC Sierra 1500, let alone the Sierra HD, even though the Hummer is nearly twice the price of many HD trims.
What’s more, in order to get this business, dealers have to get a list of customers with GMC Hummer reservations and log an abundance of hours with customers answering questions about the vehicle, timelines, and more. Some dealers have been working with Hummer customers for the last two years now, with no end in sight and not a single vehicle delivered thus far, which could be considered too much work for such a tiny invoice.
Additionally, many sales people have pay plans that are based on front-end profit. On some pay plans, the pricing means the sales person wouldn’t get paid any more than a mini deal on a Chevy Sonic. To note, not all pay plans consider holdback to be profit, at least as far as the salesman’s front-end pay is concerned.
It’s also worth noting that dealers were required to make several major upgrades just to sell the new GMC Hummer EV, including the installation of EV charging stations that could require extensive electrical overhauls for the entire dealership, brining costs as high as $50,000 in some cases.
Furthermore, GM has communicated that it will be analyzing Hummer EV deliveries and surveys with a microscope. And yet, despite producing a vehicle with extensive requirements of the sales people, the payout is relatively meager.
As a reminder, the GMC Hummer EV is available with both a Pickup and SUV body style. The GM BT1 platform provides the bones, while GM Ultium battery and GM Ultium drive tech provides the motivation. Output can range as high as 1,000 horsepower. Production takes place at the GM Factory Zero plant in Michigan.
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Comments
Makes sense a bit. My dealer isn’t charging over MSRP, BUT they are requiring some $2k protection package and $750 or so inflated tint package.
Hey Travis,
Which dealer are you using for your reservation?
Covert GMC/Buick/Cadillac in Austin TX, closest one too us even though still 30-40 miles away. They seem pretty nice overall and I don’t mind the tint package too much but its about twice the price as I could get it done for with my choice, but the other “protection package” is a waste and $$$ – for some coatings, ceramic, and key replacement if lost, and VIN etching (who needs that anymore). Ug.
$2.75k is still better than the 50k markup that some dealers are asking for. I might switch my reservation over to Covert.
Totally, and at least they are providing SOME value – enjoy yours!
Not surprising. Batteries are expensive. Really expensive. I don’t see them coming down in price either as cobalt/lithium/nickel get more expensive. More cost to build, less profit even at high prices.
Most even.
Ever worked in a major process plant? Eletric motors are 5-20K a pop depending on what HP size. These have 3 motors, a combined HP of 1000, and all the accessories to run these motors; aka drives, controllers and isolators.
Also, all the accessories can’t be driven by serpentine belt or vacuume. Eletric AC, brake boost, heater coil. It also has 2 transaxles.
Despite the 30K battery, this thing probably has another 40K in motors. That’s at 70K before adding the car. Now add all the accessories, body, premium interior. Now consider that it has GM’s most advanced traction system with both air suspension and quadrasteer.
As little as dealers are making on this, I bet you GM is loosing another 10-20K per unit.
There is a little more to the story. GM ties a huge amount of EV profit to their EVX program which requires dealer participation in all kinds of GM required pieces such as the pricing policy (no advertised discounts below invoice which happens to be MSRP) and their direct retail platform.
If a dealer jumps through those hoops they get fed some backdoor cash equal to a little over 3% of MSRP and 9% of options per unit.
Just another way to control dealers by holding half of a vehicles profit hostage.
Stealerships have dug their own hole raping customers for decades. I want to see more control of them, not less. I’m sorry, but the stealership owner living in his million dollar mansion with his 2 vacation houses, and multiple boats won’t get any tears from me
Very interesting and informative GMA.
I criticized the recent Celestiq articles but this one is quite insightful.
If gm and their dealers are already making little to no money on small and medium sized cars and have therefore dropped them and they’ll perhaps lose money on this giant SUV, where will the future profits come from? If the Hummer has a razor thin margin then logically the other Ultium products like Silverado EV will too, at least at first. I’ve pointed out repeatedly the irony that gm must continue to sell massive quantities of profitable big pickups and SUVs, that are bad for the planet, in order to be able to sell unprofitable EVs that are supposedly good for it. Sounds like that’ll be true for dealers too.
Sounds to me like a lot of BS and even better reason not to by EV!
I agree, when this EV stuff started the price was going to be cheaper than ICE. The government would like people to go EV but no one can afford them.
Boo Hoo. Stealerships ONLY making $3k on a vehicle? I guess that should put a damper on the stealership owners plans for his third vacation house or fourth boat. I’m crying for you all. Pathetic.
There is a serious flaw in the pricing of Hummer EV. Although expensive to the consumer, it has significantly more value than the price. Customers are buying them and immediately selling them for 50k to 100k more than they paid and the dealer and the salesman make pennies. It cost my dealership $250k to upgrade my facility and supplies to charge a Hummer EV. Try not to blame the dealerships for trying to make a reasonable return. ( not to mention that most dealership facilities’ land and building cost 15-30 million.)
No tears for dealerships. The amount of work they need to do for selling a car ordered online is extremely minimal and inflated by this article. There are other ways for them to make money from GM on the backend of these deals by following the rules.
They didn’t source the leads or hustle for a sale in the majority of cases. Pre-orders are handed to them on a silver platter. Bootstrapping mandatory fees and ADM is an unacceptable straw grab. It’s gotten to the point that those of us who did our own due diligence to buy our cars need to bring a lawyer into the signing room.
Salespoint education is minimal or nonexistent, the customers who pre order come in knowing more than the person handing the keys over. They do nothing to enhance the experience at this point.
They should be thankful for any take they get at all.
If I had any choice to bypass dealerships for point of sale I would absolutely take it, and I’m not a one man island on that thought. Customer expectations and sales models have changed, and some dealers are struggling to adapt. That is their problem. Not the customers.
Basically, what the Hummer EV does for a dealer is to be a magnet for drawing in prospective buyers who are in the market for a pickup truck, SUV, etc. and are merely curious about checking the Hummer out. While there, they might as well check out GMC’s other offerings that are more in line with what they are looking to buy.
Cry me a river…complete BS suggesting there’s hardship for the dealers…they don’t have to sell anything, the Hummers sold themselves online. Deliveries are bringing people to your dealership, and you’re moving a unit.
This simply sounds like propaganda in support of dealer markups.
AWWWW…Breaks my heart…meanwhile Chevy dealers are price gouging customers purchasing a Corvette…BOTH BEFORE AND AFTER SIGNING THE SALES CONTRACT!
They will find a way to make it up,they always do.
Not sure who in their right mind thought that one of the first GM EV’s made available to the masses should have been a $100,000+…..HUMMER!? Seriously, what’s the market demand for a Hummer…what’s the market demand for an EV…what’s the market demand for a vehicle over $100,000??
This is Mary’s great marketing idea, I believe most of the vehicles sold are purchased by middle class people and can’t afford to purchase a $100000.00 vehicle
Jason,
A 9,100 pound Hummer…..what’s the market demand for personal-use vehicles in that weight class?
It seems the goal was to make an EV for Arnold Schwarzenegger-types that would make EVs appear tough and less geeky and thereby cool and envied and more desirable by the masses.
In reality though, they built a preposterous vehicle that no one needs. The Hummer EV, at its absurd weight, isn’t cool at all. It’s a vehicle for the phony virtue signalers like John Kerry that circle the globe in a fossil fuel-sucking private jet lecturing to the little people about the urgency for them to take action on climate change.
Nobody who actually cares about the planet should be running to the gym in one of these morbidly obese vehicles.
At over 9,000 lbs the poor dealerships will make plenty of profit on $1000 brake jobs every 6 months and $400-$500 tires plus installation. The real money is made in the service center. It supports all of the dead weight running the sales side of the business. Have to pay for the owners private jet, yachting, and estates while supporting all of the leaches that cling to every one of them.