GM’s Silver Bullet: The Costco Auto Program
Cox Automotive’s headline reads, “EV (Electric Vehicle) sales growth slows,” and Tesla is storing unsold inventory (~47K vehicles) in empty parking lots across the country.
Supply has outpaced U.S. consumer demand, which has caused several automakers (General Motors (GM), Ford, etc.) to scale back aggressive electric vehicle rollout plans.
U.S. automakers are turning to Costco’s Auto Program as their last hope. Automakers pay a participation fee, and Costco secures exclusive savings for Costco members.
GM plans to leverage Costco’s Auto Program for EVs increasingly, per CNBC:
- Costco Auto has facilitated more than 500,000 vehicle sales annually over the past five years on average (~3% of all vehicles sold in the U.S. annually)
- About 7% of member requests for vehicles to Costco Auto were related to electric cars in 2023
The typically steep price point of EVs is a significant hurdle to mass adoption: Edmunds’ pricing data showed that the average price of an electric car was 42% higher in the first quarter of this year than gas cars.
Automakers are bullish on Costco’s ability to help them increase market penetration since Costco members are typically affluent—35% of its members make more than $125K annually.
With Costco in the driver's seat, EVs might finally get the bulk-buy boost they need.
