It's time to adapt or take the money and run for Cadillac dealers who aren't sold on parent automaker General Motors' commitment to move to an all-electric future. According to a report from Automotive News on Monday, GM won't force any dealer's hand, and instead, will provide up to half a million dollars to politely give up their rights to sell Cadillac vehicles.
Buyouts aren't uncommon in the industry, but this one in particular comes amid massive transformation at the largest American automaker. GM is steadfast in its commitment to transition to only electric cars by the end of the decade at the earliest. Meanwhile Cadillac could offer an EV-only lineup by the end of this decade, depending on market conditions. The Cadillac Lyriq is the first piece of the puzzle, set to arrive in early 2022. To show GM means business, part of a $27 billion investment into future EVs went to bringing forward the Lyriq's launch date by nine months. There are 30 more EVs coming by 2025, too, and GM said two-thirds of them will launch in the US.
So, if Cadillac dealers believe in the message GM's sending, they'll need to cough up at least $200,000 to invest in improvements before the Lyriq arrives. If not, dealers can take GM's buyout offer and drop the Cadillac brand from their network. A Cadillac spokesperson told Roadshow, "Cadillac is providing a fair mechanism for dealers that choose not to participate on our EV journey. We are making a genuine effort to offer fair and equitable assistance should they wish to exit the Cadillac business. Ultimately, the decision is up to each individual dealer."
How many dealers might not be on board? Rory Harvey, Cadillac's vice president of sales, service and marketing, previously said he expects the vast majority will be along for the ride. According to the latest report, though, even a buyout offer of $300,000 can equal 10 years' worth of new Cadillac vehicle sales for some dealers. In other words, it could be a win-win for some franchises struggling right now.