The traditional dealership model may not be the best way to sell EVs, and GM is making plans.

As we previously reported, GMC dealerships that opt to sell the upcoming Hummer EV may have to invest some $200,000 into their operations in preparation to sell and service the electric pickup truck, as well as future EVs. Fortunately, reports suggest GM aims to help simplify the process and help assure dealers make a profit.

According to a new report via Automotive News, GMC may limit or completely eliminate floorplan costs for the 2022 Hummer EV and 2024 Hummer Electric SUV. For those unaware of the terminology, in very simple terms, floorplan costs apply to financing for vehicle inventory. Basically, if you want a vehicle on your dealer floor, you have to pay for it.

GM has made it clear that as it moves forward with EVs, dealer reform is necessary. It has already pointed out that Chevrolet is working on a plan to have regional inventory lots available for dealerships to pull from.

The automaker is also looking into working with each dealership on an individual basis to assess its ability to sell the upcoming EVs, its projected inventory needs, and its financial situation. A multi-faceted strategy is in the works, but GM's vice president of global Buick-GMC Duncan Aldred told Automotive News that covering floorplans costs is a focal point. He shared:

"We're going to take the risk on that now."

"The dealer will be whole. It's more precise than now where basically we give dealers a lump sum [of floorplan assistance] and if it's not enough, that's unlucky and if it's too much, it's lucky."

Aldred said GM will cover the costs until the vehicles leave the dealer lot, or for up to a month. After dealers work through the initial reservations and deliveries, GMC may switch back to a more traditional process. At that point, covering floorplan costs may vary by location. Aldred added:

"As we go through a full lifecycle, like every vehicle, the demand and supply balance changes. When we get into that period where dealers are stocking vehicles, we will change that number. The key thing is we'll always make a dealer whole to what we believe is a reasonable period of time whether that's 90 days, 30 days, 60 days."

This is all due to the fact that the current floorplan credit system is inconsistent among dealers. Some dealerships get more cars than they need, others are short on inventory, etc. Aldred also said that GMC plans to push dealers to offer transparent pricing policies and no official discounts. All marketing will use MSRP, though dealers could work to negotiate with customers on an individual basis.

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