Buick Offering Buy Out Dealers Who Don’t Want to Start Selling The EVs
All of General Motors’ brands have begun a shift to electrification. Buick is one of those automakers and will soon
All of General Motors’ brands have begun a shift to electrification. Buick is one of those automakers and will soon debut its first electric SUV. The company then declared it would only offer EVs after 2030. With that information in mind, many traditional dealerships want to continue selling cars that run on fossil fuels. Buick is therefore providing a buyout to dealers who are hesitant to sell electric vehicles.
Buick will unveil its first fully electric vehicle in 2023, according to Car & Driver. As a 2025 model year vehicle, the Electra will start production in 2024. Due to the growing popularity of electrification, experienced automakers like Buick won’t limit themselves to only one model. With the production of purely EVs beginning with the 2030 model year, the GM brand intends to electrify its complete lineup.
The company will only market and sell electric SUVs in addition to EVs. Therefore, there won’t be any new Buick sedans added to the lineup. Furthermore, dealership groups may find such news to be unsettling. Not just due to the costs associated with switching to an entirely EV inventory but also because of those expenditures. This specific General Motors brand, though, is prepared to act.
According to The Wall Street Journal, GM will provide a buyout plan for every Buick dealer in the United States as Buick transitions to an all-electric lineup. Buick’s dealers, which total around 2,000 nationwide, will have the option of accepting a buyout offer from GM.
The buyout offers a way out for Buick dealers unwilling to make the financial commitments required to market and maintain electric vehicles. Buicks won’t be available for sale at dealers who accept GM’s buyout offers, but they will still be able to sell other GM vehicles. The buyout deal was verified by Global Buick Chief Duncan Aldred, who the outlet contacted.
Aldred adds that dealers will need to make significant investments in their businesses. Installing electric car chargers, procuring the necessary equipment to repair EVs, and giving employees the training to sell electric vehicles require a significant investment. GM is aware that not everyone is eager to spend money.
According to Aldred, many dealers won’t be able to afford to spend a significant sum of money making sure a dealership has everything necessary to sell and service electric cars. For years or decades, dealers in regions of the country where EVs aren’t common won’t see a return on their investment. Everything also depends on how competitive the market for Buick’s EVs is.
According to the Wall Street Journal, adding changes to a facility can cost more than $300,000. Neither GM nor the requirements it will impose on dealers who wish to sell EVs from Buick were disclosed, nor did it say how many dealers it anticipates will accept the buyout.
The future dealer requirements, according to a Buick representative who spoke with Reuters, “are a natural and important next step on our path towards electrification to guarantee our dealers are prepared to sell and service these unique vehicles appropriately.”
A similar buyout offer was provided to Cadillac dealers by GM a few years ago. A third or so of GM’s Cadillac dealers agreed to the buyout. To buy out Cadillac dealers, GM invested about $274 million. According to reports, GM anticipated Cadillac dealers would spend between $200,000 and $500,000 on tools and training to support the brand’s transition to electric vehicles.