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GM: Cadillac ELR features tech beloved by Volt users
Source: Bloomberg News |
January 23, 2013, Wednesday
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WHEN General Motors Co decided to make a plug-in hybrid, there was lively discussion behind closed doors whether the first model should be a Chevrolet or a Cadillac. The Chevy arguments won out and the Volt was born. The Volt has had a tough time, with disappointing sales. Now, GM has a second chance with Volt technology: the Cadillac ELR plug-in hybrid, being revealed at the North American International Auto Show in Detroit.
"GM is saying to the world we're committed to this extended-range hybrid system," said Larry Dominique, executive vice president of TrueCar.com, a website that tracks auto sales.
While the electric-drive Cadillac won't go on sale until 2014 and first-year sales will likely be small, it's important to Cadillac and to GM. It will help to freshen Cadillac's image at a time when other luxury brands, which tend to have higher profit margins than less-expensive vehicles, have pushed Cadillac to the second tier.
"The ELR puts us in a position to be provocative, to be a technology leader, to offer something that is unique and exclusive, and those sound like attributes that go back to 'Cadillac' the adjective," Bob Ferguson, the brand's leader, said in an interview.
Reducing costs
In addition, offering another model for sale can spread the costs of the technology over more vehicles and reduce the cost per car to accelerate the time to break even on the expensive technology.
The ELR will compete most directly with offerings from unprofitable luxury electric-car start-ups Tesla Motors Inc and Fisker Automotive Inc, rather than Toyota Motor Corp's Lexus luxury hybrids, which are based on technology used in the popular Prius line. GM's new car will land closer to Bayerische Motoren Werke AG's BMW i3 electric model and Volkswagen AG's Porsche 918 Spyder.
While GM hasn't said what the ELR will cost, it will be more than the Volt. It will probably cost around US$60,000 to US$70,000, said a person familiar with the pricing who asked not to be identified revealing private plans.
The Volt went on sale in 2010 with the aim of putting GM's Chevrolet on the forefront of green technology globally. Part of Volt's problem has been price. The four-seat small car loaded up with pricey batteries is much more costly than a similar-size traditional compact.
That's one of the arguments for why offering Volt as a Cadillac may have helped. Cadillac buyers expect to pay more than Chevrolet buyers, and luxury buyers are attracted to the latest in technology, such as the Volt's unique powertrain system.
"The demographics of the electric-car buyer are really more in line with Cadillac than Chevrolet," said Rebecca Lindland, an industry analyst with IHS Automotive.
Compared with buyers of mainstream models, luxury buyers more often finance the purchase with a lease, which often requires a smaller down payment or lower monthly bill.
Innovation driver
Since the days of Henry Leland, who founded Cadillac more than 110 years ago, the brand prided itself on having some of the auto industry's innovations. Electric starters, power steering and mass-produced V-8 engines were first in Cadillac cars before costs came down and spread to cheaper vehicles. Volt technology would have been another in the list.
Ferguson acknowledged that'd he heard the arguments before that Cadillac should have gone first. Another GM executive, Ed Welburn, the company's design chief, confirmed it was part of the early development discussions.
If the model was just for the US, then the arguments for selling the technology under a Cadillac badge first would be right, said Bob Lutz, the former GM vice chairman, who led development of the Volt.
"But Chevrolet was/is GM's global brand, and we wanted global distribution," he said in an e-mail. "A Cadillac-branded Volt would have had almost zero potential in Europe, Latin America, Eastern Europe, Australia and Asia."
As the debate about Volt continued, GM designers and engineers worked in the background on the ELR. The new two-door Cadillac is sportier than the four-door Chevy. It's as if the Volt and Cadillac CTS Coupe had a baby named ELR.
"The top question was not around fuel economy," Ferguson said of ELR's market. "It was more around performance, styling and technology leadership."
"GM is saying to the world we're committed to this extended-range hybrid system," said Larry Dominique, executive vice president of TrueCar.com, a website that tracks auto sales.
While the electric-drive Cadillac won't go on sale until 2014 and first-year sales will likely be small, it's important to Cadillac and to GM. It will help to freshen Cadillac's image at a time when other luxury brands, which tend to have higher profit margins than less-expensive vehicles, have pushed Cadillac to the second tier.
"The ELR puts us in a position to be provocative, to be a technology leader, to offer something that is unique and exclusive, and those sound like attributes that go back to 'Cadillac' the adjective," Bob Ferguson, the brand's leader, said in an interview.
Reducing costs
In addition, offering another model for sale can spread the costs of the technology over more vehicles and reduce the cost per car to accelerate the time to break even on the expensive technology.
The ELR will compete most directly with offerings from unprofitable luxury electric-car start-ups Tesla Motors Inc and Fisker Automotive Inc, rather than Toyota Motor Corp's Lexus luxury hybrids, which are based on technology used in the popular Prius line. GM's new car will land closer to Bayerische Motoren Werke AG's BMW i3 electric model and Volkswagen AG's Porsche 918 Spyder.
While GM hasn't said what the ELR will cost, it will be more than the Volt. It will probably cost around US$60,000 to US$70,000, said a person familiar with the pricing who asked not to be identified revealing private plans.
The Volt went on sale in 2010 with the aim of putting GM's Chevrolet on the forefront of green technology globally. Part of Volt's problem has been price. The four-seat small car loaded up with pricey batteries is much more costly than a similar-size traditional compact.
That's one of the arguments for why offering Volt as a Cadillac may have helped. Cadillac buyers expect to pay more than Chevrolet buyers, and luxury buyers are attracted to the latest in technology, such as the Volt's unique powertrain system.
"The demographics of the electric-car buyer are really more in line with Cadillac than Chevrolet," said Rebecca Lindland, an industry analyst with IHS Automotive.
Compared with buyers of mainstream models, luxury buyers more often finance the purchase with a lease, which often requires a smaller down payment or lower monthly bill.
Innovation driver
Since the days of Henry Leland, who founded Cadillac more than 110 years ago, the brand prided itself on having some of the auto industry's innovations. Electric starters, power steering and mass-produced V-8 engines were first in Cadillac cars before costs came down and spread to cheaper vehicles. Volt technology would have been another in the list.
Ferguson acknowledged that'd he heard the arguments before that Cadillac should have gone first. Another GM executive, Ed Welburn, the company's design chief, confirmed it was part of the early development discussions.
If the model was just for the US, then the arguments for selling the technology under a Cadillac badge first would be right, said Bob Lutz, the former GM vice chairman, who led development of the Volt.
"But Chevrolet was/is GM's global brand, and we wanted global distribution," he said in an e-mail. "A Cadillac-branded Volt would have had almost zero potential in Europe, Latin America, Eastern Europe, Australia and Asia."
As the debate about Volt continued, GM designers and engineers worked in the background on the ELR. The new two-door Cadillac is sportier than the four-door Chevy. It's as if the Volt and Cadillac CTS Coupe had a baby named ELR.
"The top question was not around fuel economy," Ferguson said of ELR's market. "It was more around performance, styling and technology leadership."
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