GM Offering to Buy Out Buick Dealers That Don't Want to Sell EVs
【Summary】With Buick set to go all-electric by 2030, General Motors is willing to buy out dealerships that don’t want to invest money into selling Buick’s upcoming EVs.
General Motors has announced that it only wants to sell zero-emissions vehicles by 2035. For GM's brands, that means large changes are in store. Buick, one of GM's luxury brands, declared that it would become an all-electric automaker by 2030. That puts Buick at the forefront of GM's electrification goals and makes the automaker more relevant than ever. Unfortunately, it also puts dealers in an awkward position.
GM Giving Buick Dealers A Way Out
With Buick set to go all-electric, GM will offer all a buyout plan for all of its Buick dealers in the U.S. reports The Wall Street Journal. All of Buick's dealers, which number approximately 2,000 in the country, will be given the opportunity to accept a buyout deal from GM. The buyout gives Buick dealers that aren't interested in making the necessary investments to sell and service electric cars a way out of selling Buicks. Dealers that accept GM's buyouts won't be able to sell Buicks, but will be able to continue selling other vehicles from GM.
The outlet spoke with Global Buick Chief Duncan Aldred that confirmed the buyout plan. As Aldred points out, dealers will be required to invest heavily into their operations. Installing electric car chargers, purchasing the necessary equipment to service EVs, and providing personnel with the appropriate training to sell electric cars is a hefty investment. GM understands that not everyone is interested in making the investment.
"Not everyone necessarily wants to make that journey, depending on where they're located or the level of expenditure that the transition will demand," he said. "So if they want to exit the Buick franchise, then we will give them monetary assistance to do so."
Buyouts For GM Are Becoming Normal
As Aldred claims, investing a large amount of money into ensuring a dealership has everything it needs to sell and service electric cars won't be feasible for a lot of dealers. Dealers in areas of the country where EVs aren't popular won't see a return on their investment for years or decades. All of this also hinges on whether Buick's EVs are competitive in the marketplace, too. The Wall Street Journal claims that making improvements to a facility can require an investment of more than $300,000.
GM didn't provide any information on how many dealers it expects will accept the buyout or what kind of requirements it will force upon dealers that want to sell EVs from Buick. Speaking with Reuters, a Buick spokesperson stated, "The future dealer requirements are a logical and necessary next step on our path towards electrification to ensure our dealers are prepared to properly sell and service these unique vehicles."
A few years ago, GM offered Cadillac dealers with a similar buyout plan. Approximately one-third of GM's Cadillac dealers accepted the buyout. GM spent around $274 million in costs to buy out Cadillac dealers. Reports indicate that GM expected Cadillac dealers to spend between $200,000 to $500,000 on equipment and training to support its move to be an electric brand.
Vineeth Joel Patel
Joel Patel has been covering all aspects of the automotive industry for four years as an editor and freelance writer for various websites. When it comes to cars, he enjoys covering the merger between technology and cars. In his spare time, Joel likes to watch baseball, work on his car, and try new foods
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