General Motors is utilizing Costco Wholesale as a key tool to drive sales of its new all-electric vehicles among U.S. consumers. With the expansion of its EV portfolio to target mass-market segments, GM has turned to the Costco Auto Program for EVs, which offers special pricing and incentives to Costco members, who number more than 50 million in the U.S. The strategic partnership with Costco has the potential to significantly boost GM’s reach and sales in the EV market.
As part of their shift towards electric vehicles, automakers such as GM, Ford, and Volkswagen are exploring new strategies to increase sales and profitability. This includes focusing on hybrid vehicles as a stepping stone towards full EV adoption, as well as entering charging partnerships to build consumer confidence in the market. Intermediaries like Costco are becoming increasingly important in driving EV sales, given their large customer base and strong demographic for new vehicle buyers.
Costco Auto Program, a third-party service offered by the retailer, acts as a facilitator for franchised dealers and automakers like GM, offering special pricing and discounts to Costco members. The program has facilitated over 500,000 vehicle sales annually on average over the past five years, making up at least 3% of all vehicles sold in the U.S. Such partnerships allow automakers to tap into Costco’s vast customer base and leverage their strong demographic to target potential EV buyers.
A growing number of Costco’s vehicle sales, including electric vehicles, indicate that EVs are gaining traction among consumers. Costco members have shown interest in new technologies like EVs, making it an ideal platform for automakers to market and promote their electric offerings. In addition to GM, Costco Auto has partnerships with other automakers like Volvo, Audi, and others, offering nationwide discounts and incentives to Costco members.
Costco’s reputation for providing value and quality to its members adds credibility and consumer trust to the partnership with automakers like GM. Costco members are typically affluent, loyal customers who prioritize value in their purchases. This aligns well with the target demographic for EV sales, as automakers seek to attract more suburban and urban households with higher incomes. Leveraging Costco’s brand and consumer experience can help drive increased adoption of EVs among American drivers.
Dealers and automakers partnering with Costco Auto also benefit from the retailer’s marketing and advertising efforts, which help promote their vehicles to a broader audience. GM has been a partner of Costco Auto since 2011 in the U.S. and 2019 in Canada, leveraging the retailer’s strong brand reputation. Automakers pay subscription fees to Costco Auto to cover marketing and advertising costs, and the program has been instrumental in driving EV sales and increasing consumer interest in electric vehicles.
