There’s no Operation Warp Speed for national distribution of electric vehicles. Every brand is on its own, and how each goes about it says as much about the brand’s relations with retailers as its commitment to cleaner personal transportation.
At issue is who should pay for facility upgrades required to sell and service EVs.
Last month, Cadillac’s 880 U.S. dealers were offered a choice of spending at least $200,000 for chargers, tooling and training to be able to sell Cadillac’s EVs — starting with the Lyriq in 2022 — or taking a buyout to give up the franchise. About 1 in 6 reportedly cashed in their chips.
Factors outside of electrification are at play within General Motors’ halo brand. Cadillac remains over-dealered in the U.S., especially relative to other luxury lines, diluting throughput for its dealer network and squeezing profitability as a result. It’s easy to understand why a low-volume Cadillac dealer, facing a large estimate for upgrades, sees a buyout as an attractive exit ramp.
Compare GM’s actions with those of Volkswagen as it prepares its network of 650 U.S. dealers to begin selling the electric ID4 compact crossover next year.
Volkswagen — admittedly, its hands still dirty from the 2015 diesel emissions scandal — told its entire dealer network that selling the ID4 and subsequent planned battery-electric vehicles was optional, but if they wanted in, VW would subsidize 50 precent of the costs of necessary facilities changes. The enthusiastic response: Some 99 percent of dealers raised their hands to support VW’s new line of BEVs.
The contrast is stark: One automaker says, “We’ve got new products coming; here’s a check to help you sell them,” while the other says, “We’ve got new products coming; here’s an estimate for the upgrades — or you can have a check and show yourself to the door.”
Legacy automakers, pressured by impatient regulators and investors alike, must spend billions of dollars preparing to bring significant volumes of electric vehicles to market, even before the consumer demand is evident. Readying retail outlets for the new technology is part of that process.
Difficult decisions have to be made, but we don’t want dealers to feel that they’re getting the bum’s rush. Let’s hope more brands work with dealers as partners in the EV future.