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EV upgrades may be final straw for some Cadillac dealers

2 min read

DETROIT — The dawning electric-vehicle era is likely to mark the end of the road for some low-volume, rural Cadillac dealerships.

The luxury brand is requiring U.S. dealers who want to keep their franchises after 2022 to spend at least $200,000 installing chargers, buying special tooling and training employees to handle a lineup that’s planned to be fully electric within a decade. Cadillac officials and top dealers believe that’s a worthwhile investment to give customers a first-class experience, but they acknowledge it could be too much for retailers that don’t have enough volume to recoup those costs in a reasonable period of time.

“There may be a few dealers that don’t necessarily share the Cadillac vision,” Rory Harvey, Cadillac’s vice president of sales, service and marketing, told Automotive News last week. “We believe that most dealers will.”

Harvey communicated the requirements for Cadillac’s 880 U.S. dealers to maintain their franchise beyond the arrival of the Lyriq electric crossover in late 2022 in a video last week. In an interview, he said $200,000 would be the “entry ticket cost,” with expenses potentially rising beyond that as more EVs debut and sales volumes increase.

The dollar amount is at the top end of a $120,000 to $200,000 range that General Motors recently told its U.S. dealers they would need to spend to sell EVs. And while Chevrolet, Buick and GMC dealers are able to continue selling other vehicles if they choose not to make the investment in EVs, Cadillac is requiring its retailers to go electric because it eventually doesn’t plan to ship them anything but EVs to sell.

GMC last week said that “just over half” of its approximately 1,700 U.S. dealers have opted in to selling the Hummer EV after it goes into production late next year.

Although the shift to an all-EV lineup won’t happen until closer to 2030, Cadillac is using the launch of the Lyriq as the deadline for its dealers to be ready.

“Now’s really the time to start engaging with our dealers in preparation for that,” Harvey said. “The key finish line is that they have the infrastructure in place to be able to support the customers when we have the Lyriq on the ground.”

Some smaller Cadillac dealers believe GM has been trying to get rid of them for years.

In 2015, Cadillac’s then-president, Johan de Nysschen, said the brand had “too many” U.S. dealerships, and the brand sent buyout offers to those selling 50 or fewer new vehicles a year in 2016. Most turned down the deal.

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