Instead of investing $200,000 for an electric future, they will get a buyout from GM and drop the brand.
The Cadillac Lyriq is coming, but it won't arrive at all 900-ish Caddy dealerships you see today. In fact, a new report says Cadillac will lose nearly one-fifth of its dealership network, and it's all because of the Lyriq's fully electric powertrain.
To prepare for the arrival of Cadillac's first all-electric offering, the automaker told its dealerships that some investments would be required in the form of tools, equipment, and charging systems. The price was estimated to be $200,000, and dealerships would need to foot the bill. Last week we reported that GM would offer buyouts to Cadillac dealerships who weren't interested in going electric.
Gallery: 2023 Cadillac Lyriq Concept
Now, a report from the Wall Street Journal says approximately 150 of those dealers have accepted the buyout. That would represent roughly 17 percent of current Cadillac dealerships, with each getting a buyout ranging from $300,000 to over $1 million. Motor1.com contacted Cadillac requesting confirmation and additional information on this situation, but a reply was not immediately returned.
In the US, nearly all dealerships carrying the Cadillac lineup also sell other GM brands. The specific size and locations of dealerships choosing to drop Cadillac are unknown, but the report – if accurate – does raise several interesting questions. Will GMC have similar requirements to sell its up-market, all-electric Hummer? Furthermore, with GM investing heavily in its Ultium batteries, all brands under the GM umbrella will certainly be shifting towards electric power. One must believe that such EV investments will be required sooner or later.
On the dealership side, there is little incentive to push buyers into electric vehicles. Without fuel-burning engines, EVs have considerably fewer moving parts and require significantly less regular maintenance to operate. Dealers make a majority of their money in the service department, and it's no secret that many dealerships aren't keen on evolving with the times because of it. It's not a stretch to say this could be the first volley in a lengthy process that sees the eventual death of the dealership network for all major brands as we've known it.
We will update this article with official news from Cadillac when we receive a response.