Buick offers to buy out dealers who don’t want to make the switch to electric cars

Buick is offering to buy out dealers who don’t want to make the necessary investments to upgrade to electric vehicles, The Wall Street Journal reports.

In an interview with WSJ, Global Buick chief Duncan Aldred said that all 2,000 Buick franchise dealers in the US will be given the opportunity to take a buyout. Taking the buyout means the dealer will no longer be affiliated with the Buick brand and can no longer sell Buick vehicles, although they can still sell other General Motors vehicles.

Buick is in the midst of rebranding as EV-only, with the goal to make the switch to 100 percent electric sales by the end of the decade. That will require dealers to spend a lot of money on upgrades, like chargers and EV-specific repair equipment. It will also fundamentally change how dealers do business — and many dealers have expressed trepidation about the shift to EV sales.

It’s a bit hard to gauge how dealers broadly feel about EVs, but some evidence suggests they are less than thrilled about having to upend their business to accommodate a new class of vehicles. Many car dealers are old school and tend to be stuck in their ways, for obvious reasons.

An Auto News 2022 Dealer Outlook Survey of 196 dealers and dealership managers found that the majority of respondents were unhappy with President Joe Biden’s full-throated support for EVs, noting that EVs still represent less than 10 percent of overall sales.

Many automakers are requiring dealers to make expensive upgrades to their stores to accommodate charging stations and special equipment to service EVs. These improvements can run upwards of $300,000 per dealership, WSJ reports.

There’s also a growing rift between franchise dealers, which enjoy a lot of state-level political support, and direct-to-consumer brands like Tesla and Rivian, which eschew the franchise model.

This isn’t the first time that GM has offered buyouts to dealers. In 2020, the automaker said that Cadillac dealers who didn’t want to invest $150,000 in upgrades to sell the new Lyriq EV could take a buyout instead. That process ended last year, with GM reporting that around one-third, or 575 dealers, took the buyout.

Buick doesn’t sell any EVs today but plans on rolling out its first in 2024. All of GM’s brands, including Cadillac, GMC, and Chevy, will shift to EV-only sales by 2035. So far, GM’s only EVs available for sale in the US are the Chevy Bolt and the Chevy Bolt EUV, the Hummer EV, and the Cadillac Lyriq. Next year, the company plans on rolling out the electric Chevy Silverado pickup truck, Chevy Equinox and Blazer EVs, and Cadillac Celestiq. And the automaker currently sells compact EVs in China in partnership with the state-owned SAIC.