Instead of selling electric vehicles, several United states Cadillac dealers abandon the brand


According to individuals familiar with the planning, some 150 General Motors Company dealers have agreed to end things with Cadillac instead of engaging in expensive improvements needed to market electric cars, suggesting that some retailers remain wary about changing direction battery-powered vehicles. Lately, GM offered Cadillac dealers an option: consider a buyout bid to abandon the brand or spend nearly $200,000 on dealer renovations to get their stores prepared to sell electric cars, including charging points and maintenance equipment, these individuals said.

The buyout packages varied from around $300,000 to over $1 million, added by individuals familiar with the initiative. Around 17 percent of Cadillac’s 880 U.S. dealerships chose to take the opportunity to terminate their premium brand franchise deals, these individuals added. The majority of dealers who approved the transaction still own one or two of the other models of GM—Chevrolet, GMC, and Buick—and sell about a couple of Cadillacs a month, the individuals familiar with the initiative said.

Any Cadillac dealers’ hesitation underlines that even when buyers compete for the valuation of electric cars, there are still concerns about customers’ appetite and the merchants who represent them. By delivering directly to the consumers, without franchise stores, a concept other startups plan to pursue; Tesla Inc. has become an electric-vehicle juggernaut. On the other hand, conventional car manufacturers are charged with superimposing their electric car dreams on dealer networks that make their money selling gasoline-powered cars today.

Brand dealers say they balance pricey plant improvements against speculation regarding car production, such as electrical device enhancements, which now does account for about 2 percent of U.S. vehicle purchases. Some dealers say they are holding off electric model orders, afraid that they will remain on their lots for too long. Dealers say a lack of commuting during the Corona Virus pandemic has led to a decline in demand for cars such as GM’s Chevrolet Bolt, even in markets where electric vehicles are more common in San Francisco. Rory Harvey, Cadillac’s global brand chief, acknowledged that the company gave distributors buyouts but refused to say how many or even the value of the deals they had accepted.

“The future dealer criteria are a reasonable and essential next move on our path towards electrification,” Mr. Harvey said. Those that are not prepared to make an effort, he said, get equal reimbursement for quitting the brand. If plug-in products eat up more space in showrooms, experts and executives suggest they will also reshape the dynamics of operating a dealership. For instance, electric cars have lesser components and require fewer regular inspections, posing a threat to dealers’ parts and service business, a main driver of profit.