General Motors (GM) has found a strategic ally in Costco Wholesale to help drive U.S. consumer interest in its new electric vehicles (EVs). By utilizing the Costco Auto Program, GM aims to expand its EV market presence with mass-market models like the Chevrolet Equinox and Chevrolet Blazer EVs.
Marissa West, GM North America President, expressed strong support for the partnership, emphasizing Costco’s robust brand and extensive member base. With over 50 million members in the U.S., Costco offers a significant opportunity to reach potential EV buyers. GM also holds the exclusive automotive partnership for Costco Auto in Canada.
In recent months, automakers like GM, Ford, and Volkswagen have adjusted their EV strategies to enhance sales and profitability. This shift includes promoting hybrid vehicles and establishing charging partnerships to build consumer confidence. Costco’s customer base, known for purchasing new vehicles, is seen as a key demographic for EV adoption.
Costco Auto acts as a facilitator, connecting franchised dealers and automakers with Costco members who receive special pricing and incentives on vehicles. According to Jay Maxwell, general manager of the Costco Auto Program, the service has facilitated over 500,000 vehicle sales annually in the past five years, accounting for at least 3% of all U.S. vehicle sales.
Although GM did not disclose specific sales numbers through the program, Costco noted a growing interest in EVs among its members. In 2023, about 7% of member vehicle requests were related to electric vehicles. Costco’s demographics align well with potential EV buyers, offering a significant advantage for automakers like GM.
Besides GM, Costco Auto partners with other automakers, including Volvo, Audi, and Polestar. The program provides nationwide discounts that can be utilized at any franchised dealer, with Costco recommending partner dealers for a seamless buying experience. These dealers have specially trained employees knowledgeable about available incentives and offer competitive, haggle-free pricing.
Currently, GM offers Costco members a $1,000 incentive on the Equinox, Blazer, and Cadillac Lyriq EVs through July, in addition to other company or dealer incentives. Maxwell highlighted the compelling value of these offers, especially given the existing market incentives for EVs.
The high price point of electric vehicles has been a significant barrier to mass adoption. According to Cox Automotive, the average transaction price for electric cars in the U.S. was $55,242 in April, over $10,000 higher than gas-powered vehicles.
Costco member incentives typically last between 60 and 90 days and include deals on pre-owned vehicles, maintenance, and service. Participating retailers offer up to 15% off auto repair, up to $500 off. GM has been a Costco Auto partner in the U.S. since 2011 and in Canada since 2019.
West emphasized the synergy between the Chevrolet brand and Costco, noting that Costco members trust the retailer for good value and reliable products. The demographic profile of Costco members, primarily suburban and urban households with higher incomes, aligns with GM’s target market for EVs.
Costco Auto charges automakers and dealers a subscription fee for marketing and advertising, supporting the partnership’s promotional efforts. The program originated with Price Club, which merged with Costco in 1993, enhancing its long-standing presence in the automotive sales market.
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