150 Cadillac Dealers Accept Buyouts Rather Than Tool Up for Electric Models
GM luxury brand dealers balk at estimated $200,000 in upgrade costs for electric vehicles.
Almost 20% of Cadillac dealers have opted to accept buyouts from General Motors Company (GM) rather than pay for costly upgrades needed to service and sell electric vehicles, according to a published report Friday.
The move will reduce Cadillac’s U.S. dealership count by about 150 outlets, The Wall Street Journal reported, citing people familiar with the plans.
Dealerships were offered from $300,000 to more than $1 million to exit the brand if they were unwilling to spend about $200,000 on upgrades for charging stations and repair tools, according to the report.
Most of the dealers giving up the Cadillac brand sell other GM lines such as Chevrolet and GMC, according to the report.
Electric vehicles still account for only 2% of U.S. vehicle sales, according to the report.
But shares of companies making and selling electric cars and trucks have taken off this year, led by Tesla Inc.’s (TSLA) extraordinary stock performance. Tesla’s market cap now exceeds that of most traditional U.S. automakers combined. And the company’s shares are being added to the S&P 500 index on Dec. 21. Other electric-only competitors, including Nio (NIO) , have seen their stocks surge as well.
Tesla sells its cars online without a dedicated dealer network. And because electric cars have fewer parts, the profitable parts-and-service units of many dealerships face challenges as more electric vehicles hit the road.
GM’s first electric vehicle isn’t expected until 2022.
Shares of GM rose 1 cent to $44.39 in after-hours trading Friday. Tesla shares fell 4 cents to $599 in after-hours trading.
Here is the link
https://apple.news/Aqud25sQYTkeQyFNAlYn8kATesla sells online and there is a bigger profit margin selling direct. GM is starting to figure it out. They will sell their EV online. I read another report they are offering Cadillac dealers up to $500,000 per franchise.
The link is not fact, but opinion. Porsche came out with the Taycan and immediately saw their ICE sales drop by almost half. Porsche makes about 230,000 cars per year and makes approx $19,000 per vehicle. Covid has had a big impact on all sales of new vehicles.
