Is Cadillac's Near-Volt, the ELR, Worth $76,000?
It’s interesting the way automakers think. The Volt has been a modest success, and General Motors could have gone one of two ways with it—upscale or downscale. Tesla has a more resounding hit with the $70,000 to $100,000 Model S, and it’s moving toward affordable with the $40,000 Model X. Ah, but Tesla doesn’t have a huge field of other cars whose sales will be cannibalized by the Model X.
Ward’s Auto says GM has a team studying Tesla, and it concluded that if the upstart from Palo Alto could sell 1,700 cars annually, so could Cadillac with the ELR. But there isn’t a cut-rate Model S with the same underpinnings you can buy for half the price. GM sold 24,000 Volts last year, so nobody thinks the ELR will be anything but a status niche car.
GM has been working on the ELR since its 2009 Detroit debut as a concept car called the Converj. Everybody loved it there, and the decision was made to go to production. The company needs to position Cadillac as a young, with-it brand, and it needs to recoup some of the money it invested in the Volt, reportedly $1.2 billion. Some analysts say the company is losing a lot of money on every Volt, though GM says such estimates are “grossly wrong.” Modifying a factory to build the ELR cost only $35 million, so that's not a huge gamble.
A $76,000 ELR won’t lose money (unless it doesn't sell). But is it a good deal for consumers? The ELR is quite cool looking—I saw it on the stand at last year’s Detroit Auto Show. It could also pencil out at $68,495 with federal incentives, and $2,500 cheaper than that in California. What you get is an ultra-equipped (handcrafted leather, woodgrain trim, tons of tech) and nicer-styled Volt with 58 extra horsepower. The pot is sweetened with your own “Concierge Representative” trained in “white glove customer care.”
The ELR should reach 60 mph in about eight seconds, which makes it a second faster than the Volt. It’s got aerodynamics on its side, and loses only three miles of electric range (it’s now 35).
All in all, this is what GM could do to the Volt to make it attractive to the select few, without greatly increasing the cost of producing it. It makes sense on paper. As the car hits the road early next year, we’ll see if it also makes sense on the road.