Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options. HOMEPAGE

GM desperately needs dealers to spend up to $500,000 to shift to selling electric cars. Here's its plan to convince them.

2024 GMC Hummer EV SUV
GM is looking to make a splash with the GMC Hummer EV. It's banking on its dealers being willing to spend thousands of dollars to get ready to sell them. GMC

  • Over the next four years, General Motors is investing $35 billion into electric vehicles.
  • GM is banking on its dealers being able to sell them — and many need to spend up to $500,000 to do so.
  • Here are GM's plans to support its dealers as they transition to electric.

General Motors' bid to go all-electric involves 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 automaker can't persuade its 4,500 US and Canada dealers to invest the time, energy, and most of all cash necessary to get ready to sell EVs. 

EVs demand charging infrastructure that costs between $50,000 and $500,000 to install, a GM spokesperson said. And while GM is supplying the training and education dealers need to persuade buyers to go electric, dealers are taking on most of the expense. Last year, GM gave its Cadillac dealers a choice: spend $200,000 to retool their stores for EVs or take a buyout. Nearly 20% closed up shop

"We did have to put in a hefty initial investment," said Whitney Yates-Woods, the dealer principal at Yates Buick GMC in Goodyear, Arizona. Dealers preparing for the new all-electric GMC Hummer had to spend as much as $200,000 for charging and the appropriate forklifts. "But I think it's a chance that is worth taking," she said.

Not every dealer is so bullish. According to a Detroit Free Press report, close to half of the country's 1,678 GMC dealers haven't yet signed up for the substantial charging and tooling needed to sell the Hummer. 

It's still early in the EV game, dealers say, and these expenses are a bet on the future. It's a bet GM needs them to take. 

"Our dealers and our dealer network are a competitive advantage for General Motors," CEO Mary Barra said at GM's investor day earlier this month. "They are critical to our commitment to put customers at the center of our strategy."

A necessary bet

The good news for GM and other automakers going electric is that a majority of dealers are excited to sell EVs, according to the market researcher Escalent.

Kat Urquhart, program director for the EV advocacy nonprofit Plug In America's consumer- and dealer-engagement programs, agreed that dealers aren't anti-electric. "It's just they need the support to make sure that they feel confident in making those sales," she said. 

After all, going electric is a risky bet for their livelihoods. Aside from the expense, electric cars mean new kinds of specs, features, financing, and questions from shoppers. They also need less service — stripping away a key revenue stream for dealers. 

"It's obviously very different to service a battery-powered vehicle versus a gas-powered vehicle," Yates-Woods said. "The needs of the customer are going to be much different."

GM has a variety of programs meant to help Yates-Woods and her colleagues make these sales, including special trainings and enlisting subject-matter experts and field managers across the country for dealers to "not only get EV ready but also understand our go-to-market strategy," a GM spokesperson said.

Only dealers who invest the money to upfit 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 EVs. (The spokesperson declined to say what percent of its dealers have made the investments and participated in the program.)

GM also offers a designated curriculum covering EV product and charging, the sales process, and the EV customer, according to the spokesperson — not unlike that which dealers have historically received to sell gas-powered cars.

Playing the odds

Many dealers laud the training, but the expenses still add up. Dealers told Insider that they're willing to put the money and effort into going electric, so long as they can see long-term returns.

"The expenses are only going to continue to ramp up for the dealer," said Cameron Johnson, CEO of Roanoke, Virginia-based Magic City Auto Group, which sells Buick, Chevrolet, and GMC of GM brands. "Our bet isn't necessarily on 2022 sales. Our bet is as they add additional electric models."

Others feel similarly. 

"It seems very shortsighted to me to say, I don't sell that many EVs right now so I don't want to spend all this money on the EV infrastructure," Joe Jackson, general sales manager at the suburban Detroit dealership Bowman Chevrolet, which installed eight additional chargers this year. "Because yes, we don't sell that many EVs right now, but it's going that direction."

Are you an auto dealer selling General Motors vehicles and preparing to sell EVs? Do you have a news tip or opinion you'd like to share? Contact this reporter at astjohn@businessinsider.com.

Transportation General Motors Electric Vehicles

Jump to

  1. Main content
  2. Search
  3. Account