GM relies on its dealers to spend big money selling electric cars

  • Over the next four years, General Motors will invest $ 35 billion in electric vehicles.
  • GM is betting that its dealers will be able to sell them – and many need to spend up to $ 500,000 to do so.
  • Here are GM’s plans to support its resellers when they switch to electricity.

General Motor’s bid to become fully electric means spending $ 35 billion to develop 30 new battery-powered models by 2025 and scrapping gas power by 2035. But its plans could stall if the carmaker could not persuade its 4,500 dealers in the US and Canada to invest it. time, energy and above all cash required to get ready to sell electric cars.

Electric cars require charging infrastructure that costs between $ 50,000 and $ 500,000 to install, a GM spokesman said. And while GM provides the training and education retailers’ need to persuade buyers to go electricity, retailers bear most of the cost. Last year, GM gave its Cadillac dealers a choice: spend $ 200,000 to remodel their electric car stores or make a purchase. Almost 20% closed the store.

“We had to make a substantial initial investment,” said Whitney Yates-Woods, reseller at Yates Buick GMC in Goodyear, Arizona. Dealers preparing for the new all-electric GMC Hummer had to spend as much as $ 200,000 on charging and suitable forklifts. “But I think it’s a chance worth taking,” she said.

Not all retailers are so bullish. According to a Detroit Free Press report, nearly half of the nation’s 1,678 GMC dealers have not yet signed up for the significant charge and tools needed to sell the Hummer.

It’s still early in the EV game, say retailers, and these expenses are an investment in the future. It’s an investment GM needs them to make.

“Our dealers and our dealer network are a competitive advantage for General Motors,” said CEO Mary Barra at GM’s Investor Day earlier this month. “They are crucial to our commitment to putting customers at the heart of our strategy.”

A necessary investment

The good news for GM and other electric car manufacturers is that a majority of dealers are happy to sell electric cars, according to market researcher Escalent.

Kat Urquhart, program director for the non-profit propaganda organization Plug In America’s program for consumer and retail engagement, agreed that retailers are not anti-electric. “They just need the support to make sure they feel secure making that sale,” she said.

After all, running on electricity is a risky investment for their livelihood. Apart from the cost, electric cars involve new types of specifications, functions, financing and questions from customers. They also need less service – removing an important revenue stream for retailers.

“Obviously, servicing a battery-powered vehicle is very different from a gas-powered vehicle,” said Yates-Woods. “The customer’s needs will be very different.”

GM has a variety of programs designed to help Yates-Woods and her colleagues make this sale, including special training and recruitment of subject matter experts and field managers across the country for resellers to “not only get EV ready but also understand our target marketing strategy” , said a spokesman for GM.

Only dealers who invest the money to equip their stores with chargers are part of GM’s new performance program that requires dealers to be certified with the appropriate tools and training to sell electric cars. (The spokesman declined to say what percentage of its retailers have made the investments and participated in the program.)

GM also offers a designated curriculum that covers EV products and charging, the sales process and the EV customer, according to the spokesperson – not unlike what dealers have historically received for selling petrol-powered cars.

Plays the odds

Many retailers praise the training, but the costs still increase. Retailers told Insider that they are willing to put the money and effort into becoming electric, as long as they can see long-term returns.

“Expenses will only continue to increase for the dealer,” said Cameron Johnson, CEO of Roanoke, Virginia-based Magic City Auto Group, which sells Buick, Chevrolet and GMCs of GM brands. “Our investment is not necessarily in sales in 2022. Our investment is that they add additional electrical models.”

Others feel the same way.

“It seems very short-sighted to me to say that I do not sell that many electric cars right now so I do not want to spend all that money on the electric car infrastructure,” said Joe Jackson, sales manager at the suburb of Bowman Chevrolet in Detroit. , who installed eight extra chargers this year. “Because yes, we do not sell that many electric cars right now, but it is going in that direction.”

Are you a car dealer who sells General Motors vehicles and is preparing to sell electric cars? Do you have a news tip or opinion that you want to share? Contact this reporter at astjohn@insider.com.

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