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General Motors knows full well that a fully electric future is ahead. As a company, GM wants to sell 30 electric vehicles by 2025, and Cadillac is reportedly leading the electric charge for the Detroit automaker in the United States. Recently, it was reported that GM had told dealerships to invest in the future or to withdraw. Cadillac has 880 dealerships nationwide, and now, citing sources familiar with the matter, The Wall Street Journal reports that 150 of them took a buyout of $ 300,000 to $ 1,000,000 to go out of business instead of investing $ 200,000 in charging infrastructure and other upgrades to their facilities to support the electric future of the brand.
That’s just over one in six Cadillac dealerships nationwide, so in a nutshell, a good number of them will likely close. It’s unclear if GM expected so many people to take the buyout, however, a $ 200,000 investment is likely a lot to ask for for many dealers, especially during a pandemic. That being said, some of Cadillac’s vehicles like the XT6 crossover have seen a dramatic increase in sales over the past year, and he is banking on the new Lyriq electric SUV to further improve his fortunes.
Cadillac has already shown interest in reducing the number of its dealers on several occasions, offering buybacks in the same way as now. As it stands, Cadillac has many more dealers than other competing brands like BMW, which had just 341 outlets nationwide in 2018. Mercedes-Benz, likewise, only had 363 dealers. in 2019, a fraction of Cadillac’s 800 number. despite larger vehicle deliveries to dealerships.
It looks like Cadillac’s electric future hasn’t been appealing to a number of dealers, but GM really wanted them to go anyway. Fewer dealerships mean lower costs, which could potentially increase the brand’s profits, something Cadillac, an automaker that still offers a fair number of less popular sedans, certainly needs.
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