Buick Dealerships Will Need To Invest At Least $300K To Sell And Service EVs
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Buick is set to join GM’s transition to an all-electric future, with the Buick brand going full EV across its lineup by 2030. However, that transition will require big investments from Buick dealerships, with a minimum average of roughly $300,000 to support new tooling, training, and related EV equipment.
Per a recent report from Automotive News, Buick spokesman Sean Poppitt provided some insight into the investments required for those Buick dealers that will service and sell upcoming Buick EV models. According to Poppit, the final investment to become an EV-ready Buick dealer will vary, but is estimated to be between $300,000 and $400,000, on average.
For those Buick dealers that elect not to make the EV transition, GM will offer a buyout deal similar to that offered to Cadillac dealers which elected not to sell EVs. For those readers who may have missed it, Cadillac dealers who chose not to make the jump into the EV camp were offered a buyout deal amounting to between $300,000 and $500,000. It’s estimated that a third of Cadillac’s 900 dealers in the U.S. went with the buyout, rather than invest the roughly $200,000 required to sell and service future Cadillac EVs.
According to the Automotive News Dealer Census, Buick had an estimated 1,963 dealers in the U.S. at of the start of the 2022 calendar year. Interestingly, global vice president of Buick and GMC, Duncan Aldred, recently indicated that Buick has the lowest throughput in the auto industry, pointing out that fewer dealerships could equate to higher sales counts and bigger profits per dealer.
Looking ahead, Buick is expected not to introduce any new internal-combustion models after the 2024 calendar year. Future Buick EVs will use the Electra name plus a number (E1, E2, etc.) for model designations.
Buick Wildcat EV concept
Buick unveiled a new brand identity and redesigned logo over the summer, which points to the brand’s plans for a fully electric portfolio by 2030. The brand also unveiled the new Buick Wildcat EV concept, which previews future Buick EV styling.
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The dealer I worked for had Buick, Cadillac and GMC all in one. Coming from the mid-west, I know of many dual Buick/GMC dealers. My question is this: If these dual dealers already made this investment for the GMC/Hummer EV’s, then do they also need to make another for Buick? I would think not. That brings me to the dealer I worked at for 12+ years. Having both the GMC/Buick and Cadillac, I would think they would be able to make the one investment for all this EV stuff and be good.
Anyone know the answer to this?
That would be logical. Unfortunately, corporations no longer use logic.
Unfortunately, I don’t believe that is the case. I know the Chevy EV dealer prep is significantly less. The Buick model is changing significantly and sadly I have a feeling we will lose a much higher percentage of Buick dealers than we did Cadillac. It will be very difficult for many small, rural dealers to justify the investment and changes associated with the rebrand. As a person who typically embraces change and encourages technology, I’m saddened to see the direction this is going. Not your Grandma’s Buick.
When is this charade going to end? The majority of people do not want electric cars. Good luck selling them.
that’s BS…..Do you think the Pres of the US is sitting on his hands. Wake up! How much
Govt money is going into EV’s? All the coin their putting into Charging station all around
Two countries should tell you You’re wrong!!!!!!!!!!
This makes a lot of sense, as a large part of this investment is servicing equipment, chargers, and showroom upgrades. There will for sure be a combined investment for dual brand dealerships, as it would be similar to asking a dealership to buy two sets of tools if not.
It sounds like Buick and Cadillac are similar. My guess is that GMC will still have many ICE vehicles, so less investment is necessary in the short run to take care of the Hummers they sell and service.
One man’s meat is another man’s suffering.
As we know, all manufacturers will have to produce EV vehicles because the state requires them to become independent of oil.
The $200,000 to $300,000 mentioned is an investment and the dealer can claim this for tax purposes – the state pays the investment, not the dealer.
And if a dealer doesn’t want to and GM wants to reduce the many dealers there will soon be “used car dealers” or fans who want to fulfill their “lifetime dream car dealership”. They always say there are no losers if you do it right.
It may also be the case that GM continues to repair many competitor EV vehicles centrally at Chevrolet dealers – see tesla repair at GM Dealer. Logic also says that EV vehicles are so simple that you never actually have to repair them unless the battery is defective, but then the EV vehicle is scrapped because the battery is too expensive.
An agency model such as Tesla and small start-up companies is also possible, but this does not result in customer loyalty from former ICE vehicle customers.
So you can say – GM will have to make sure that after the small series brands like Hummer, Cadillac and Buick do not switch customers to the competition.
Saying that the “state pays for the investment” is only partially true really. If the dealer makes the investment, sure they can write some of it off, but that is also money that could have been used for other investments and/or additional employees. Even if the dealer can pay for it with pure profit, which I doubt many small Buick dealers can, they still only “saved” the ~30% that would have gone to uncle Sam through taxes anyway.
It reduces “Taxable Income”, not your Tax Liability….
My local dealer is pretty small. They might put that kind of investment out for GMC. But not for Buick.
Buick has been starved of relevant investment for a long time now. They just don’t sell. Not even the big dealerships move a lot of Buick products. GM doesn’t seem to even want Buick around. This might be their chance to jettison those dealerships.
Hopefully if they make the investment for GMC, they won’t be required to do it for Buick also. I’d hate to see that brand evaporate due to mismanagement from Detroit – just like Oldsmobile, Pontiac, Saturn, Hummer, Saab, and GEO.
It’s a good thing some of those nameplates are gone. Can you imagine what inventories would look like if GM still had those?
I still say we killed the wrong make. Buick should be Chinese. North America should have kept Pontiac.
Oldsmobile……..
That would be my second choice.
that’s BS…..Do you think the Pres of the US is sitting on his hands. Wake up! How much
Govt money is going into EV’s? All the coin their putting into Charging station all around
Two countries should tell you You’re wrong!!!!!!!!!!
Will this be another deal like the poor dealerships had to do when Hummer came along and they had to build a separate building? GM did give them some money I believe, but they had to use a lot of their own I believe and then once Hummer was gone, they were left with that building and I I don’t believe they got much of an investment back from GM !🤬🤬🤬🤬🤬
They will have to at least have a separate showroom I believe.
Stay tuned for G.M. bankruptcy 2.0… Like most liberals G.M. leadership thinks you have to burn it to the ground before you can start all over.
Mary a Liberal……..really?
I think GM and other manufactures have a card in their back pocket. It wouldn’t take much to change this game from full EV to half and half. They may not be advertising they are doing things with ICE engines but I bet they have a back up plan. It will take one good change in the government to throw out all this total EV stuff. People are not happy with much of this. I’m ok with EV’s but being the only thing to buy is a joke and many people know this. GM is just doing what they have to do because of stupid people in our government currently.
Regarding the cost upgrading many dealers made record profits the last couple of years this investment won’t be that hard for many to do. Small dealers will probably be gone but in reality GM has way to many dealers.
Do you really think the dealers can’t carry the financial load for 3 Models. Every businessman knows it’s all writeoffs at the end of the year. ;ET
ARE ANY OF YOU LOOKING AT THE BUICK (COMING UP) IT’S THE BEST STYLING OF ANY
NEWCOMERS.
Isn’t gm stock down like 50%? This business plan seems weak. Toyota is even questioning this ev experiment now.
No EV: No, that is not correct. GM stock is not down 50% that I’m able to find.
Interesting comments and very good points by everyone so far. This is the type of forum I like to read instead of the many nasty ones that often come up. Anyhow.
A point was made by Lucas55 above that really makes sense. A dealer wouldn’t be forced to buy two identical sets of tools just for Buick and for GMC. I’m thinking that GM must have some type of reduced investment amount for those dual dealers. Also, these are “investments”, thus the dealership should be worth more on paper at least. A dealer that never updates or re-invests will not be worth near as much down the road as a dealer who stays modern and updated.
I guess this isn’t much different (just in price and scale) than a restaurant that needs to make updates and improvements or they will not stay fresh.
It’s amazing how many people commenting, here, have no idea what they are talking about.