Are we going to see a trend with automakers buying out dealerships that won’t sell EVs? That’s what Buick is facing with its new company direction.

Some automakers and brands have made bold announcements of their intention to build and sell only electric vehicles in the future. Many of these brands, including Buick, have scaled down their model lineup to focus solely on the vehicles that turn the most profit. While the brands might want to focus on only one aspect of the automotive world, some dealerships might not be prepared to go along for the ride.

Automakers and Dealerships Have an Interesting Relationship

The car dealer is one of the quintessential franchise programs in the world. Independent dealers sell vehicles under the umbrella of an automaker, similar to the McDonald’s franchisee selling the Big Mac. If McDonald’s changes the menu or deletes specific items, its not up to the franchise owner to choose to go a different direction. That could put their franchise rights in jeopardy. The same holds true for car dealers. If a car dealer doesn’t want to sell what a brand is offering, they might not be a car dealer for much longer.

Buick is Heading in Only Two Directions

If you though that when the EV market opened up Buick would begin to sell cars again, you’d be wrong. Buick has made it clear to dealerships that the only models they will sell are EVs. Not only will Buick be a 100% electric vehicle brand after 2030, but this brand will also continue to only offer SUVs. The SUV market has exploded and electric versions of crossovers and SUVs are as popular as the traditional versions of these vehicles. With these two clear cut directions in mind, what does this mean for the dealers that won’t sell SUVs?

GM Offers a Buyout Option for Dealers That Don’t Want to Play the Game

The automotive world is shifting toward electric vehicles. If that’s not been made clear enough for some, look at the plans laid out by many automakers and the new regulations put in place by the California Air Resource Board (CARB). Whether you agree with this direction or not, is not the point, this is where we are headed. Currently, there are more than 1900 Buick dealerships across the United States. Those dealers that don’t want to upgrade to sell EVs will be given a buyout from GM.

What Upgrades Are Required of Buick Dealers?

Electric vehicles are completely different from the traditional internal combustion models we see on the road every day. Most dealerships have a gas tank and pump on site to keep cars fueled up for test drives. Doesn’t it make sense these locations also offer charging stations for the same purpose if they plan to sell electric vehicles? That certainly makes sense and its part of the requirements that Buick has sent down to dealers to prepare them for the future of selling these new electric models.

How Many Dealers Will Take the Buyout?

The current number of dealers that aren’t wiling to invest in the required changes hasn’t been revealed by Buick yet. The company does understand the desire to avoid this expenditure and offers the monetary assistance to transition away from the Buick brand and exit the franchise. The big question isn’t how many Buick dealers will leave, but how many dealers across the country will eventually choose to sell only used cars or transition to a brand that isn’t focused solely on electric vehicles. Eventually, those dealers will no longer exist, but that’s still many years away.

What is the First Buick EV to Arrive?

The first EV model heading to dealers is the Buick Electra. Strangely though, the Electra will also be the name of some of the other electric models from this brand. You see, all of the new Buick EVs will carry the Electra name. The first version should be in production in 2024 and arrive as a 2025 model year offering. We’re not sure when the naming system will become confusing or if Buick will use a numbering system similar to BMW and Audi to help us keep things straight.

Because the production timeline is still a few years away, we don’t know much about this new premium electric SUV. Because Buick is a GM brand, we expect this new Electra to use the Ultium battery pack with at least 100 kWh of capacity. This should give the new model 300 miles of driving range. Hopefully, the price of this new Buick will not be much more than $50,000, which would put it right in line with some of the other electric SUVs we already see in the market.

How Does a Buick Buyout Impact the GMC Brand?

GM has two premium brands, Buick, and GMC. Most of the Buick dealers in the country also sell GMC SUVs and pickups. With only a handful of stand-alone Buick dealers around the nation, a dealer that takes the buyout on the Buick side would still be part of the GM family and sell GMC products. Of course, there could eventually be a requirement for GMC dealers to add electric chargers or other EV items. We already have the GMC Hummer EV, which is a massive electric truck and the new GMC Sierra EV is on the way. Will these dealers need to knuckle under and change or will they leave the GM family entirely?

A Bigger Question than Buick Dealerships that Won’t Sell EVs

GM has four brands, which means many dealers can easily continue to sell one or more of the brands while not offering the others. This isn’t the case for most dealers in the country. What happens when a BMW dealer refuses to sell EVs, or a Volkswagen dealer won’t install electric chargers?

These are possibilities as we move away from gas-powered vehicles and into a world where electricity drives our cars every day. Will we see fewer new car dealers in our towns because of the franchise requirements to support electric vehicles? This question won’t have an answer for a few years.