General Motors is offering Cadillac dealerships payouts of up to $500,000 to call it a day in case they don’t want to invest in selling the company’s upcoming electric vehicles.
GM has previously confirmed that Cadillac dealerships will need to pay at least $200,000 to make the necessary changes needed to sell EVs, specifically for the installation of chargers as well as new tooling and training.
Not all Cadillac dealers are ready to make this commitment, though, and have until November 30 to accept a buyout.
“We wanted to move fast and make sure dealers are ready for the acceleration,” vice president of Cadillac North America, Mahmoud Samara, said in a statement. “This is purely an option for those dealers who feel the EV journey is not suitable for them.”
While GM has refused to disclose how much it is offering Cadillac dealerships, people familiar with the issue suggest most offers range from $300,000 to $500,000. Those dealerships that do accept a buyout must agree to not discuss it publicly.
All of Cadillac’s 880 dealerships are eligible for the buyout. This marks GM’s latest attempt to reduce the number of Cadillac dealers, having first offered buyouts of between $100,000 and $180,000 to its 400 lowest-volume retailers in 2016 under ex-President Johan de Nysschen.
Despite the generous offer, Samara told Auto News that most dealerships are expected to go forward with electric vehicle sales.
“We had discussions with all the dealers around what is our EV journey, how are we going to get there? It was a very open, transparent discussion — allowing all dealers to understand and buy in,” Samara said.
Dealers that accept a buyout can continue to sell new Cadillacs through 2021 and access the brand’s used-vehicle auction through 2024. According to automotive consultant Stuart McCallum, smaller dealers are more likely to accept the buyout offer, particularly those that only sell a few Cadillacs a month.