GM Threatens To Cut New EV Allocation For Dealers Applying Markups

General Motors wants to deter its dealers from applying markups to its upcoming range of electric vehicles. 

Following Ford’s example, GM has issued a warning letter to dealers tempted to request additional markups from customers. Posted by the Silverado Evolution forum, the letter sent by GM North America president Steven Carlisle via email is pretty straightforward, with the main takeaway being that the automaker will not tolerate such practices.

After mentioning upcoming product launches like the Chevrolet Silverado EV, GMC Hummer EVs, GMC Sierra EV, and Cadillac Lyriq, for which GM is working hard to meet customer demand amid the semi-conductor shortage, the executive issued a clear warning to dealers tempted to profit from the short supply and apply markups.

"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 interest 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."

Gallery: 2023 Cadillac Lyriq

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The letter continues with Steven Carlisle reminding dealers of their obligation to "ethically and lawfully sell GM products," as stated in Article 5 of the Dealer Sales and Service Agreement (DSSA). He also speaks against dealers that work with brokers who promote new GM vehicle allocation, which is a breach of the GM DSSA.

Carlisle ends the letter by threatening action against dealership markups and use of brokers, like redirecting their vehicle allocation.

"GM will be forced to take action if it learns of any unethical sales practices or brokering activities that undermine the integrity that customers expect from the Chevrolet, Buick, GMC, and Cadillac brands. For the small minority of bad actors that are engaging in the conduct identified above, this letter serves as a notice that GM reserves the right to redirect your vehicle allocation or take other recourse prescribed by the Dealer Sales and Service Agreement."

Now that we know GM's official stance on additional dealer markups, it will be interesting to see if the letter will be enough to put an end to such practices. You can read the letter in full below.

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