GM has said that its Cadillac brand could go all-electric by the end of the decade, and it is facing some pushbacks from its dealerships.
The automaker has now given them a generous ultimatum.
With the announcement of the acceleration of its electrification plans last week, GM said that Cadillac could become an all-electric brand by 2030 — though management didn’t commit fully to the goal and said it would still depend on the market.
For legacy automakers who depend on networks of third-party dealers to distribute their vehicles, it is important to convince dealers that electric vehicles are the way to go, since they are the ones that will have to sell their vehicles on their lots.
Previous studies have found that electric car adoption has been slowed down by car dealers who are “dismissive and deceptive” when it comes to electric vehicles.
Now GM is facing some pushbacks over the electrification of the Cadillac brand.
Automotive News reports:
Some dealers, on the other hand, aren’t ready to make that shift — or to spend at least $200,000 on the chargers, tooling and training that GM is requiring. They have until Nov. 30 to decide whether they’d rather just get out instead.
Mahmoud Samara, vice president of Cadillac North America, commented on the issue:
We wanted to move fast and make sure dealers are ready for the acceleration. This is purely an option for those dealers who feel the EV journey is not suitable for them.
But GM believes that they already had too many Cadillac dealers for the size of the brand and therefore, they turned this problem into a solution.
Now they are offering dealers who don’t want to make the investment to sell electric vehicles to opt out of selling Cadillacs by the end of the month and receive up to $500,000 in settlements.
There are 880 Cadillac dealers eligible for the deal in the US.
We have long been saying that legacy automakers need to find ways to get dealers on board with electrification if they want to survive.
It seems like GM has found an interesting solution here.
Since they already needed to downsize the number of dealers due to the size of the brand, they give dealers an ultimatum: Make the investment to go electric or take a buyout.
Forcing dealers to invest in preparing for electric vehicles is crucial since it will force them to want to recoup that investment by actually selling electric vehicles and not just focusing on what they have most on their lots, which is generally gas-powered vehicles.
Let’s see if it pays off.
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