Cadillac dealers jump ship rather than switch to selling electric vehicles, report says

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Cadillac wants to make electric vehicles its future, but some dealers do not agree.

Cadillac

As Cadillac prepares to become an electric vehicle manufacturer, it has reached a point where it must begin to prepare its dealer network for the change. This means many expensive and mandatory upgrades to their facilities for franchise dealers unless GM gives them a way out of their franchise contracts.

According to a report released Friday by the Wall Street Journal, this is precisely what GM is doing. Specifically, GM is giving Cadillac dealers the choice between giving up their ability to sell any Cadillac and taking a buyout or investing hundreds of thousands of dollars in an uncertain future.

Currently, there are around 880 Cadillac dealers in the United States and, according to WSJ reports, as many as 150 of them have taken out GM buyouts for amounts ranging from around $ 300,000 to $ 1 million. This makes sense since many of these dealerships also sell other GM lines like Chevrolet, Buick and GMC, and their Cadillac business may only account for a very small portion of their overall annual sales.

“Future dealer requirements are a logical and necessary next step on our path to electrification,” said Rory Harvey, Cadillac’s global brand manager, in a statement. “Those who are not ready to make this commitment receive fair compensation for leaving the brand. ”

The dealership network’s concern is understandable when you look at the changes in the auto industry in the wake of the COVID-19 pandemic and the relatively slow adoption of electric vehicles by the public. Add to that Cadillac’s unproven record with electric vehicles, and that leaves plenty of room for things to go wrong.

Cadillac expects its first production electric vehicle, the Lyriq SUV, to hit showrooms in late 2022.

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