150 Cadillac Dealers Prefer to Leave Brand Instead of Selling EVs

Dealerships might turn out to be a large hurdle for General Motors' plans to go electric, The Wall Street Journal writes.

The newspaper says that, according to insider tips, approximately 150 GM dealerships in the US decided to drop the Cadillac brand and accept a buyout (said to be between $300,000 and just over $1 million). 

The dealerships in question specifically chose to accept the buyout instead of investing in electric vehicle (EV) infrastructure.

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GM's electrification plans hit dealership hurdle

The dealerships in question reportedly accepted buyouts from GM instead of spending roughly $200,000 in order to upgrade their dealerships with charging stations and repair hardware and tools needed to sell EVs.

As Engadget reports, many of the brands that accepted the payout only sell a few Cadillacs per month and make most of their revenue from Buick, Chevrolet, and GMS. 

However, General Motors, which owns the Cadillac brand, has 880 Cadillac dealers in the United States. This means that losing 150 is still a significant fraction of its dealerships.

Though Cadillac brand leader Rory Harvey confirmed to The WSJ that GM was offering buyouts, he didn't confirm the number of dealers that are reported to have accepted.

An EV versus combustion engine debate?

While some people might argue this is a significant blow for the EV industry, the truth is that it's more likely a sign of changing times. EV makers aren't typically bound to physical dealerships, and their owners, in the same way that traditional brands are.

Tesla and other new EV makers tend to follow a direct-to-customer model meaning they have a strong infrastructure in place for service centers.

What's more, regardless of how owners feel, California is banning sales of new gas-powered cars by 2035, and other states and indeed countries are likely to follow suit — if they haven't already announced similar plans.

We wouldn't be surprised if this wasn't purely about EVs versus gas vehicles for the roughly 150 dealers that reportedly accepted the buyout. In trying times, $200,000 in upgrades is no small amount when the strictest EV regulations won't come into force for over a decade.