Cadillac requiring dealers to make $200,000 in upgrades for EVs

DETROIT — Cadillac on Wednesday told its 880 U.S. dealers that they will need to invest at least $200,000 each on electric vehicle chargers, tooling and training to continue selling the brand's vehicles beyond 2022.

The brand plans to launch its first EV, the Lyriq crossover, in late 2022, and have a fully electric lineup by the end of the decade.

"Now's really the time to start engaging with our dealers in preparation for that," Rory Harvey, vice president of Cadillac sales, service and marketing, told Automotive News. "There's a lot of planning that has to be put in place to make sure they're absolutely ready."

Harvey communicated the required investment to dealers in a video Wednesday morning. Brand officials have been discussing the company's product plan and implications of an all-EV lineup with dealers during regional events and at this year's National Automobile Dealers Association convention.

Cadillac worked closely with its dealer council to develop the standards, which are integrated into the brand's standard franchise agreement to which all of its dealers must adhere. The current agreement expires Nov. 1.

"Our dealer council did say there may be a few dealers that don't necessarily share the Cadillac vision," Harvey said. "We believe that most dealers will."

Charging stations are among the biggest portions of the $200,000, which Harvey called the "entry ticket cost" for dealers as Cadillac's EVs begin to arrive. High-volume retailers might need to spend more than that, he said, and expenses could increase as the brand introduces more EVs, necessitating more chargers and tooling.

Dealers who don't think an investment of that size makes sense for their business could remain with Cadillac beyond Nov. 1, but their future would be subject to discussions with brand officials, Harvey said. Dealers who make the upgrades can spread out the expenses, as long as they get everything done by the fourth quarter of 2022.

"The key finish line is that they have the infrastructure in place to be able to support the customers when we have the Lyriq on the ground," Harvey said.

The automaker has made Cadillac its lead brand for electrification, and the requirements differ from those being imposed on U.S. dealers who sell Chevrolets, GMCs and Buicks.

GM recently asked its non-Cadillac dealers who want to sell EVs to sign a deal outlining requirements for certain upgrades and training that is separate from their franchise agreement. The EV agreement, which estimates each dealership's costs at $120,000 to $200,000, has met opposition from dealers in some states and rural areas who question the payoff the investments will provide them.

GMC this week said "just over half" of its approximately 1,700 U.S. dealers have opted in to selling the Hummer EV after it goes into production late next year.