General Motors is looking to nip the any dealership issues in the bud before its influx of EVs hit the market. In a recent letter to its dealerships, GM has warned against markups above MSRPs and reservation amounts, threatening to redirect vehicles away from offenders.
General Motors ($GM) is an American automaker with hands on deck to kick off 2022, as it furthers its electrification transition to remain competitive in a shifting automotive landscape. After a tough end to 2021 for EV sales on the wings of a massive recall, GM is turning the page in an attempt to live up to its “all-in by 2035” EV promise.
The automaker is sure to be busy the next few years, as it has promised to deliver 30 electrified models by 2025. A resumption of Chevy Bolt EV and EUV assembly lines at the end of this month will certainly help, but GM is also working on bringing new EVs to market.
The Cadillac Lyriq has entered pre-production and will begin deliveries “in a few months.” It will be joined by the GMC Hummer EV³ˣ, which should arrive this fall to the tune of just $100,000. Recently, there’s been a lot unfolding for GM in terms of EVs, so here’s a quick recap:
- GM is investing over $150 million to produce electric motor components in New York
- GM scores huge tax break on $1.3 billion plan to build new EVs in Orion
- GM to construct North American materials processing factory for Ultium EV batteries
- 2024 Chevy Silverado EV unveiled: 400 mile range, Multi-Flex Midgate, worksite/home backup power and more
- GM unveils sharp-looking Equinox EV starting at game-changing $30,000 price
- GM announces GMC Electric Sierra Denali pickup truck, releases teaser
With a slew of new EVs on the way, GM will still rely heavily on its dealerships to help boost sales and promote EV adoption. With that said, the automaker has recognized early issues regarding dealership markups and is already taking action.
GM threatens action against dealership markups and use of brokers
Shout out to the Silverado Evolution forum whose administrator posted a letter emailed to dealerships by GM North America President Steve Carlisle, warning against additional dealer markups (ADMs) to customers.
Carlisle mentions the demand surrounding many of the GM brand EVs mentioned above and also cites limited inventory supply due to the global semiconductor shortage. The GM President first speaks to the markups being added by some dealerships:
Unfortunately, it has come to our attention that in connection with some of these announcements and launches, a small number of Dealers have engaged in practices that do not support a positive sales experience for our customers. This puts our collective interests at risk and generates negative press that reflect poorly on GM’s brands and your dealerships. Specifically, it has come to our attention that some dealerships have attempted to demand money above and beyond the reservation amounts set in GM’s program rules and/or have requested customers to pay sums far in excess of MSRP in order to purchase or lease a vehicle.
Carlisle then reminds its dealerships that they are ethically and lawfully obligated to sell GM products. This is followed by a calling out of some dealerships using brokers who are promoting new GM vehicle allocation – a direct breach of contract.
While GM recognizes that this is a small group of perpetrators so far, it looks to squash the issue before it truly becomes one, threatening to reallocate dealership vehicles and pursue “other recourse prescribed by the Dealer Sales and Service Agreement.”
American competitor Ford Motor Co. has seen similar issues following the colossal demand of its F-150 Lightning pickup. The company sent out a letter in a similar vein at the start of of this year. Both automakers have plenty in their respective EV pipelines, and are clearly looking to keep consumers happy to enable as many future sales as possible.
If any dealership is trying to charge you a markup on a new EV, abort! And let us know.