General Motors is betting big on battery-electric vehicles, and its Cadillac brand has been tasked with spearheading their rollout.
The automaker has already revealed the Cadillac Lyriq crossover SUV due in early 2022 and confirmed four additional EVs for the luxury brand, including a flagship sedan. Cadillac could even become a full-EV brand by 2030 depending how the market evolves.
Naturally, GM wants Cadillac dealerships to get on board—which means they’ll need to spend big to upgrade their facilities with charging, tooling and training for EVs. Mahmoud Samara, vice president of Cadillac North America, told Automotive News (subscription required) in an interview published in November that dealerships will need to spend at least $200,000 to prepare for the arrival of Cadillac EVs—or accept a cash offer from GM to close up shop.
Cadillac Lyriq concept
Citing people familiar with the matter, The Wall Street Journal (subscription required) reported last week that roughly 150 dealerships in the United States chose to take the cash instead of upgrading for the EV transformation, with some buyouts reportedly over the $1 million mark. Those dealerships account for about 17% of Cadillac’s 880 U.S. stores, and most of them represented one or more additional GM brands, according to the sources.
It’s not the first time GM has tried to reduce its number of Cadillac dealerships, which triple the number from rivals such as the German luxury brands. Back in 2016, the automaker offered a similar payment to some of the smaller operations if they closed.
One issue with the EV transformation could be a loss in revenue for dealerships. EVs typically require less maintenance than their internal-combustion counterparts, and they could become even more reliable down the road as the technology improves. This is because EVs tend to have fewer moving parts, and of course there are no more oil changes and engine tuneups. This will be something dealerships will need to prepare for when it comes to EVs, in addition to upgrading their facilities and training their staff.