General Motors released this teaser image of an illuminated Cadillac crest on the front of the Lyriq ahead of the crossover’s debut.
DETROIT – About 150 General Motors dealers have accepted buyouts and will stop selling Cadillacs as the Detroit automaker pivots the luxury brand to lead its all-electric vehicle efforts, a person familiar with the details confirmed to CNBC.
GM recently told its 880 U.S. Cadillac dealers that in order to sell its upcoming EVs it would cost at least $200,000 to upgrade dealerships. The cost includes EV chargers, tooling and training. Such capital expenditures are typically viewed as part of business for larger dealers, but could be challenging for smaller dealers, which Cadillac has more of throughout the country compared with other luxury brands.
The buyouts mark the most recent indication of GM accelerating its EV efforts, which include investing $27 billion in all-electric and autonomous vehicles by 2025. That investment, an increase from $20 billion announced earlier this year, is expected to produce 30 new EVs globally by 2025, including more than 20 just for North America.
“This forward product offering needs to be combined with exceptional customer experience,” GM said in an emailed statement. “The future dealer requirements are a logical and necessary next step on our path towards electrification to ensure our dealers are prepared to provide customers an exceptional experience.”
GM expects a majority, if not all, of its Cadillac cars and SUVs sold globally to be all-electric vehicles by 2030.
David Butler, chairman of Cadillac’s national dealer council, said the leadership board suggested the buyouts as a way for dealers who may not want to participate in the EV investment a way out of their agreements with GM.
“We suggested the offer be something worthwhile for the dealers,” he told CNBC, citing a previous buyout from 2016 that failed to attract many Cadillac dealers.
The Wall Street Journal, which first reported the number of dealers taking the buyouts Friday, said GM’s buyout offers ranged from around $300,000 to more than $1 million. Buyouts were based largely on sales and varied depending on the size of the dealership, according to the company.
The roughly 150 dealers accepting the buyouts represent about 17% of Cadillac’s U.S. dealerships. Dealers had until Nov. 30 to decide on a buyout, according to Automotive News, which first reported the offers last week.