Update: EV-related dealer buyouts from Buick and Lincoln

Welcome to this episode of The Friday 5 with Steve Greenfield, Founder and CEO of Automotive Ventures, an auto technology advisory firm that helps entrepreneurs raise money and maximize the value of their companies.

Buick dealer buyouts

Back in September, Buick offered to buy out any of its U.S. dealers who do not want to make the investments necessary — as the brand transitions to an all-electric lineup by the end of this decade.

Buick plans to shift to an all-EV lineup by 2030 and has said it does not plan to introduce any new gasoline-powered vehicles after 2024.

At this point, Buick has not shared the number of dealerships that have elected to take the buyout offer.

This week, we got an update on their plans.

Buick dealers who choose to stay with the brand will need to invest at least $300,000 to $400,000 to keep their stores and qualify to sell their future electric vehicles. The minimum investment required of dealerships includes funds for required tooling, training, and other EV equipment to support both sales and service.

Buick continues to offer to buy out any U.S. dealers who don’t want to make these required investments to prepare to sell EVs.

Buick had 1,963 U.S. dealerships at the start of this year.

Buick’s dealer buyout offer followed a similar offer from Cadillac, which also plans to be all-electric by 2030. Cadillac dealerships were required to invest, on average, $200,000 to prepare to sell and service EVs.

About a third of Cadillac’s nearly 900 U.S. dealerships elected to take the buyout, with offers from $300,000 to $500,000 per location.

Currently, there are 577 Cadillac dealerships in the U.S.

We also recently heard from Lincoln, who has asked their dealers to commit to EV-related facility upgrades for EV models, which will equate to about $900,000 per store.

The weirdest thing about that news is that Lincoln does not yet sell any battery-powered vehicles and isn’t expected to for several more years. But Lincoln executives say that their dealers need to prepare now to attract a younger demographic of buyers who its research shows are demanding luxury EVs.

We will continue to report on how automakers are deliberately trying to shrink their dealer footprints through a combination of both EV-related facility upgrades tied to offers to buy back stores with the intent of retiring them.

Companies to watch

Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my monthly Industry Intel Report, I showcase a few companies each month, and we take the opportunity here on the Friday 5 to share some of those companies each week with you.

Today, we have two companies to watch: Bitesize and Yank Technlogies.

Bitesize

Bitesize allows dealers to engage thousands of prospects with little effort.

Bitesize allows you to send personalized “blast” messages to 1,000 prospects from your CRM and customer lists very efficiently in under a minute.

The reason that I love Bitesize is that their artificial intelligence makes it easy for you to identify and respond to your hottest leads so you can focus on making more deals.

Bitesize syncs notes back to your CRM so your salespeople can continue to have a singular experience. Every lead gets connected to chosen team members within seconds.

You can check out bitesize at www.Bitesize.co.

Yank Technolgies

Our second company to watch this week is YankTech.

Yanktech is powering the interiors of the next generation of vehicles. Their technology allows passengers to charge multiple mobile devices simultaneously while eliminating complex wire bundles, reducing wiring and assembly costs, and improving system reliability for the automaker.

The reason that I love YankTech is that wireless charging today is hindered by several limitations: high heat while in use, cross-coupling, and a necessity for proper alignment.

Surpassing these limitations, YankTech strives to revolutionize charging technology by providing true wireless power solutions to automakers.

You can check out YankTech at www.YankTechnologies.com.

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So that’s your weekly Friday 5, a quick wrap-up of the big deals in the automotive technology space over the past week.

If you’re an auto tech entrepreneur working on a solution that helps car dealerships, we want to hear from you. We are actively investing out of our new DealerFund.

If you’re a dealer who wants to invest in early-stage auto tech companies that benefit your business, let me know. We are still accepting new investors into the fund.

If you’re interested in joining our investment club to make direct investments into auto tech and mobility startups with small checks, let me know.

And don’t forget to check out my new book available on Amazon called “The Future of Automotive Retail.”

Thank you for tuning into CBT News for this week’s Friday 5, and we’ll see you next week!