- GM is leveraging its partnership with Costco to find more EV buyers.
- Costco Auto facilitated 500,000 annual sales in the last few years.
- Members are predominantly affluent and feel like the savings are worth it.
If you’re the type of person never to leave home without your Costco card, you could be the target for GM’s latest push to up EV sales numbers. In the face of slowing demand, and little to no profits to speak of, automakers are looking at all sorts of ways to move the needle on electric adoption.
GM says it sees value in using Costo Auto, the wholesaler’s automotive arm, at pushing its EV cars out to a demographic that is eager to get a deal. GM wants to target the mainstream, as it attempts to move EVs away from being curios to something that has mass-market adoption with the likes of the Chevrolet Equinox and Blazer.
Read: GM CEO Says EV Shift To Happen “Over Decades”, Spokesperson Says 2035 Goal Remains
While they’re not the only manufacturer to partner with Costco, GM’s North America President, Marissa West, told CNBC that she sees a “huge opportunity” to expand GM’s reach with Costco’s 50 million U.S. members and Canadian members, too.
And Costco Auto holds a bigger sway than you may think. Even if they don’t directly sell cars, rather acting as an intermediary with franchised dealers and automakers, the wholesaler’s auto arm managed to facilitate 500,000 sales last year alone. For context, that’s at least 3 percent of all U.S. car sales.
GM has not disclosed how many vehicles it has sold through Costco, but Costco Auto reports a growing interest in EVs, with 7% of member requests in 2023 being related to electric vehicles. “Our membership has always liked new things, and EVs are absolutely new to the marketplace,” said Jay Maxwell, general manager of the Costco Auto Program. “Costco has a very strong demographic that fits well with EV buyers.”
Currently, GM offers Costco members a $1,000 incentive on the Equinox, Blazer, and Cadillac Lyriq EVs through July. This discount is in addition to other company or dealer incentives. “It has a pre-negotiated price already established that we work with the dealer every month to ensure it’s updated and market competitive,” Maxwell explained. “You know the price is going to be great because you’re getting it through Costco, allowing you to focus on and enjoy the buying experience.”
Costco members, predominantly affluent suburban and urban households aged 42 to 59, are a key demographic for automakers like GM, aiming to place more EVs in American garages. Market research firm Numerator reports that 35% of Costco members earn above $125,000, significantly higher than the average retailer’s customers.
“Costco’s members are extremely loyal,” said Julie Craig, vice president of shopping insights at Kantar. “They feel that the savings through their memberships offset the fees and that Costco offers value beyond what they can get elsewhere.”
