GM President Mark Reuss says that General Motors dealers will make money on all-electric vehicles, stating that the automaker’s transition to EVs will present an opportunity to turn a profit for retailers.
According to a report from WardsAuto, Reuss addressed dealers during the recent J.D. Power Automotive Summit held in conjunction with last week’s National Auto Dealers Association (NADA) trade show.
GM President Mark Reuss delivers a speech in 2021
“We’re going to give dealers the opportunity to make money on EVs,” Reuss said during the presentation. Reuss also expressed admiration for auto dealers as “the best entrepreneurs I’ve ever met in any business.”
Although some indicators point to slower-than-expected demand for EVs in the U.S., the latest figures also show nearly 1.2 million EV sales during the 2023 calendar year, marking a 7.6-percent share across the entire U.S. market, up from a 5.9-percent market share during the 2022 calendar year. During his presentation, Reuss characterized the increase in sales as “a healthy leap.”
Reuss also addressed concerns over a potential drop in dealership service department profits, which are based in the belief that EVs are typically less complicated than equivalent ICE-based models and, as a result, may require fewer repairs and less maintenance.
“I’m not sure brakes, tires, and alignments last forever,” Reuss stated. “These are not forever vehicles. They are not problem-free. We will rely extensively on dealers to service those vehicles – and make money on it.”
On the topic of hybrids, Reuss reiterated GM’s intentions to bring new plug-in hybrid electric vehicles (PHEVs) back to the U.S. market, saying that “regulators treat PHEVs the same as EVs,” but adding that “PHEVs are still powertrains on one car. They are expensive. And they are expensive to make.”
Late last year, General Motors CFO Paul Jacobson stated that the automaker expects to see profitability from its EV portfolio from the second half of the 2024 calendar year onward. GM pulled back on its initial goal of producing 400,000 EVs in North America by mid-2024, but still expects to produce between 200,000 and 300,000 units this year.
Subscribe to GM Authority for more GM business news, GM electric vehicle news, GM dealer news, and around-the-clock GM news coverage.
Comments
I know this message is primarily meant for investors and dealerships, but as a consumer it is not a reassuring message to hear that GM EVs will need enough frequent servicing that GM dealerships will continue to make a profit. I want my vehicle to last as long as possible and profit margins don’t factor into that at all.
Until you have a warranty issue and the closest dealership to you is an hour away….might matter then
Can’t service what they don’t sell…
My thoughts exactly. It just tells me “in several years your battery will degrade and you will need to bring the car to us for a $20k battery replacement.” But the joke will be on them because at that price it won’t even be worth replacing and the car will just be junked and I will replace it with an ICE.
The batteries have 8-year 100k warranties associated with them, so it will be a while before that replacement
The problem with that warranty is that warranties don’t cover wear and tear items. Degradation of a lithium battery is just part of wear and tear. So even if it has that warranty, GM will refuse to replace that battery under the premise of “oh its natural wear and tear and we don’t cover that.”
My wife has a cousin who is one of these Tesla fanboys. And even he who is a diehard Tesla fanboy has admitted that after three years of ownership his battery capacity dropped to 85% of what it was. His car sits outside in the hot Florida sun year round which inevitably accelerates degradation. And guess what. Tesla doesn’t cover replacing that battery because its a “wear and tear” situation.
After 40 months of driving 30,0000 miles, my Tesla Modei 3 only lost about 5%. Original was 310 miles and it fell to 295 on a full charge. So far my Lyriq, with 15,000 miles, will charge to 312 miles which is the original. Actually, I think it over charges because when charged to full at 312 I can drive for three or four miles before it drops to 311
Well I’m hoping what I read in PC Mag is true in that EV batteries are built with a high focus on durability as opposed to phone and laptop batteries which are built to put performance first and durability last. Because this is a major concern for me. BTW, how do you like that Lyriq? One of the reasons I switched to GM was because of all the EVs out there the GM ones (and Hyundais) are the only ones I find appealing. Its just too bad GM wants an absurd $50k for the Blazer when I can have a Lyriq for just $3k more. Hopefully they don’t pull this bait and switch crap with the Equinox EV.
Tesla from what I have seen treats their customers poorly…
I had a ‘growing pains’ problem with my LYRIQ that, after 7,200 miles the battery would refuse to charge… I figure, between consultants being sent from Detroit to my dealership and back, and with a nicer loaner to me for a month, and $195/hour labor charges from the dealership, that GM spent about $20,000 on this repair at least, which included a brand spanking new Propulsion (rated 102.5 kwh) battery.
A similar extended trouble with a dead 12 volt battery problem earlier seems to have racked up another $5,000 repair on GM’s dime..
Tesla would NEVER spend this amount of money trying to make an EV customer satisfied….
I was actually somewhat embarrassed that they would go to this much trouble to help me. The dealer obviously was overjoyed at the rental and labor charges they could bill back to GM corporate.
As far as BLAZER Ev pricing goes, it seems high to me also.. The Caddy LYRIQ Tech trim is a better value especially with a 340-347 hp (depending on who is counting) drive motor and a much larger battery for more range.
You have to love specific Blazer styling to pay extra for it.
I think GM is really trying to do solid in customer service. But especially in the EV realm because 1) This is a premium product for them at this point and 2) They are betting on many people buying their EVs to be new to the brand. I have an XT5 (which like I said, I bought coming from mostly Japanese brands to experience owning a GM product since I haven’t had a GM product since our 1984 Buick Century). So far love the car but it has had to make a few trips back to the dealership. The first was because I spotted the weather stripping on the sunroof coming off when I was giving it its first car wash. The replaced it no problem, gave me a loaner while they had it done. The second was a weird issue with the warning chime making weird static sounds. After having the amplifier replaced and then holding onto the car for a week to investigate the issue, oddly, it never had the issue again. But the customer service at the Caddy dealer by me was phenomenal. They really wanted me to love the product and ownership experience while working through these issues. And with that said, my next vehicle to replace my Rav4 will be a GM. Don’t know if it will be electric yet though. I’m usually a late adapter. I’d rather the tech get to a point where the bugs are worked out and everyone else has one already.
You do realize the warranty for the battery is specifically for capacity loss? So if you constantly run your battery from 100% to 0% and its capacity drops below a specific % (I think it’s 70%) they will replace your battery.
You really can wear and tear your battery because it protects itself by design. You can’t drain it to 0% and you can’t charge it to 100%. There are buffers on both ends. Sure your display will show 0% and 100% but that’s not the true state of the battery.
Kinda frustrating that people who should know better keep floating that old Bromide.
1). GM Batteries are built to a different objective than cell phones, where small size and high power density and fast charging are far more important than longevity.
2). GM gets criticized all the time for ‘S L O W’ fast charging. In fact, my LYRIQ charges just proportionally as fast as my BOLT ev and EUV do. The LYRIQ is so slow overall that it mostly charges at a 74 kw rate. For the size of its battery -listed at 102.5 kwh but I would estimate 106 kwh, the battery isn’t even really even fast charging…. Yes it will charge at 186 kwh for a few minutes but it quickly is throttled down – at times to as low as an amazing 3 kw… Amazing in that that is much less than a trickle charge rate given its size. Of course most BLAZER EVs with batteries in the 80 kwh range will charge proportionally even more slowly.
It would not surprise me to get several hundred thousand miles life out of a big battery, seeing as it is so babied both while charging, discharging, and temperature controlled year ’round, besides relatively few FULL charge / discharge cycles… Partially charging and partially discharging triples the life of batteries anyway, which is the typical state for these batteries.
No matter, – GM batteries are getting more long lasting….While their gas and diesel engines underperform and need overhauls sooner than ever. You have to buy a 3500 HD to get a reliable engine and Allison transmission. Both the old and new cylinder deactivation schemes have multitudes of lifter troubles, if comments from owners mean anything….
And I’m still not convinced ‘Next to impossible’ to service Belt in OIL timing belts wont delaminate 2,000 miles after the 60,000 mile power train warranty runs out.
Yep just like whats happening to the volt. If they would only make the batteries more cost prohibitive which is what I am hoping the Ultium setup will do. Green Tech will replace your volt battery with used modules for about 3500 or so before c19…then it jacked up to 9k as if suddenly there was a shortage but has drifted down slightly below that it seems. Just unbelievable.
Yup, sounds like dealers aren’t drinking the koolaid either, good luck.
@Richard P
And for the experts who really understand they know it is a complete lie what he said.
No, dealerships will NOT make anywhere near the money they currently do and that is 100% why they are lobbying to spread FUD about EV’s.
What they do not understand I that they are actually alienating the youth and said youth will just order from NON Legacy Auto while sitting on the coach instead of going to a dealership.
If they do not change they will die off. And I do not care if they do.
I have always truly believed that Dealerships are terrible for consumers way before Tesla came to be. Now everyone that is paying attention understands.
The laws they use are like 100 years old. I say good riddance hopefully one day.
And for the ones that will say that Automakers will take advantage of the consumers then you do not understand how competition works. They are NOT a Monopoly.
If you as a consumer feel that Tesla is taking advantage of you, move on to say GM or whatever.
Once you order a vehicle exactly how you want it from your cell phone, there is absolutely no going back.
Dealers are “the best entrepreneurs I’ve ever met in any business.” he says? I guess when you consider dealer markups, added on accessories, overprices service plans, low-balling on trade ins……I am not a big fan of that kind of ‘entreprneurs.
He’s only ever worked in the auto industry and only at gm so his perspective might best be called “narrow”.
He meant to say entremanures.
“….the automaker expects to see profitability from its EV portfolio from the second half of the 2024 calendar year onward.”
Based on their announced EV portfolio rollout, pricing and push for a rich mix I’m guesstimating their they’re basing their profitability projections on an ATP in the mid-$60,000 range. Good luck.
Say what your got to say. Doesn’t make it true.
If the ev rollout is going so great with big profit potential, why is gm back tracking and planning on more PHEV models.
I like Mark, but I am 100% my dude is just coasting his job.
so EV’s cost more to service? Or is he saying the margins are higher on the service?
Nobody knows, another good reason not to be a Guinea pig.
As a “Dealer” person, I can tell you that there will be plenty of service needed on these EV’s. Just not the same kind we are all used to. Example: EV’s are heavy, as such they go through tires at an alarming rate. On top of that the cost of “EV tires” is much higher than a regular passenger car. As battery technology continues to mature they will become more and more serviceable. Meaning we will be able to open it up and replace modules or sections instead of tossing out the whole battery that has one bad cell or two. Beyond that, there will be tons of electronic module replacements. These things are loaded with modules. The modules have modules! Units used in harsh climates will have issues with electronics and modules, software programing will be needed etc. Service departments will look less like service departments and more like the Geek Squad counter at Best Buy.
GM won’t be making money on my EV purchases. Got stung badly by GM and their dealerships after 50 years of my GM loyalty. Bye!
Does anyone know what “maintenance services” an EV needs. I’ll start, tire rotation, cabin air filter, keep going.
Wiper blades
Windshield washer fluid
Battery coolant replacement (150,000 miles)
Brake fluid replacement (150,000 miles)
Gas strut (hood/trunk) (100,000 miles)
New tires every 15-20 K Miles
Baloney.
I’m at 40,000 on original tires on my EV.
People too heavy on the acceleration pedal are gonna tear up tires no matter the drivetrain.
Agreed Baloney…….
I argue with the dealership when doing a NY State yearly inspection that the OEM tires should last 30,000 miles. Then they reluctantly agree to pass it.
Then they say I need new brakes. Which I have NEVER done ANY brake maintenance for any plug-in car I’ve ever owned – even at 97,000 miles.
They say “Your Brake pad area has been reduced to 50% !!!”…..
I respond, “Oh Heavens ! What is NY minimum required?” (they tell me 25%), then I say
“Great ! My brakes are twice as good as they have to be”.
Then they send me a suggested maintenance for various things of around $1,300 which I immediately circular file. With my VOLT this January, they gave me $16,279 for it so that along with POS rebates let me buy a brand new 2023 stripped BOLT EV for $3,450 – the amount on the Cheque.
I still get CarFax reports from the dealership in Ohio who no doubt bought it from Manheim.
As far as the GEEK SQUAD goes, I’ve had too many friends’ horror stories regarding exorbitant payments there. Unless Its a good deal I avoid that BB store.
Henry Ford II also told his Dealers that they would make money on the Edsel, too!
The Edsel was actually a complete line up of not bad vehicles (rather like the Lincoln-Mercury Division), and other than a few dopey ideas (eg: open exposed brushed commutator motor to shift the PRNDL worked fine in the summer time but then when ICE lifted the brushes in the winter the car couldn’t be shifted out of park), it was seemingly an OKAY car.
Big problem was FORD oversold the car – my dad told me they would put people in popular bars and clubs yelling out “THERE GOES AN EDSEL !!!!”, when everyone took for granted it was just another FORD, albeit, a slightly upscale one.
The real problem was launching a very ugly car in the middle of a very bad recession…
I think dealerships are gonna have to take on other services like wraps, racks, audio upgrades, detailing, lift kits, suspension upgrades, etc.
Knock on wood, the Dealerships in my area in general are much, much more honest than the typical crooks around here 35 years ago when I bought my first car. All my EV purchases have been more than pleasant experiences.
EG: My 2019 Volt with 55,000 miles, although in excellent shape CAR FAX said it was worth $13,900. My dealership gave me $16,279 for the car.. Yes, they can make an additional $4,350 on the next transaction due to the used PHEV point of sale rebate offer, but for the dealership to give me a huge percentage of that Bonanza shows the night and day difference in honesty lately.
Not at $195 per hour Labor rates, for detailing, wraps, audio upgrades etc.
@rEVolutionary
I agree with you. They need to reinvent themselves.
One idea I have had fo their survival is to hope that Autonomy actually becomes a reality and they get automakers to sign contracts for them servicing said vehicles. Like ride share and Cargo Vans.
Meaning fleet companies that own multiple AV’s.
Uber
Lyft
Waymo
Amazon
and so on.
He meant to say entremanures.