GM Offering Buyout to Buick Dealers Who Don’t Want to Sell Its EVs
Buick plans to make its lineup all-electric by 2030. Not every dealer is onboard with it.
General Motors will offer buyouts to Buick dealer franchise owners as an alternative to the steep investment cost in EV infrastructure and servicing, fully cashing them out of the Buick brand.
GM announced in June of 2022 that it is preparing to have a full EV lineup by 2030, piggybacking on GM’s aim to have a majority EV lineup globally by 2035. Global Vice President of Buick and GMC Duncan Aldred spoke to The Wall Street Journal and offered some details about the buyout.
Aldred confirmed to WSJ that Buick will extend the buyout offer to all of its U.S. franchised dealers, allowing every owner to duck out of the brand’s EV future and possibly opening the door for Buick to retake control of its sales model. Cadillac hatched a similar plan for its dealers last year, which resulted in several hundred Cadillac dealers closing.
Most Buick dealerships in the U.S. are attached to other GM brands. The buyout will only affect the Buick franchise, allowing dealers to sell other GM cars. Aldred is scheduled to outline the plan to dealers during a virtual meeting on Friday.
Renovating stores to accommodate EV servicing, charging, and storage is expensive. According to WSJ, costs can run over $300,000 and could require extensive modification to a building for the extra electricity required. These upgrades are mandatory to maintain a dealer franchise.
This buyout offer could signal Buick’s intention to take control of its sales experience. After a fraught couple of years with rampant markups and tenuous consumer relationships, more traditional automakers are researching direct sales models. The truth is that automakers often don’t have complete control over the dealer experience. This wasn’t an issue until supply became scarce.
“Not everyone necessarily wants to make that journey, depending on where they’re located or the level of expenditure that the transition will demand,” Aldred said. “So if they want to exit the Buick franchise, then we will give them monetary assistance to do so.”
Got a tip? Email tips@thedrive.com
