Cadillac Boss: “We Are Not A Bunch Of Luddites” On EV Tech, But Even Tesla Isn’t Making Money

1 year ago by Jay Cole 137

Head of Cadillac, Johan de Nysschen, shares some of his thoughts on his luxury lineup from NAIAS in Detroit, and of course has some choice musings on plug-in vehicle technology (especially given his not-so-positive history with EVs).

Cadillac Boss Tells Yahoo Finance Why He Doesn't Need To Be Concerned About Regulations Or Compliance

Cadillac Boss Tells Yahoo Finance Why He Doesn’t Need To Be Concerned About Things Like All-Electric Vehicles, Regulations Or Compliance

On competing with Tesla, profitability of all electric vehicles:

“Tesla is a very interesting brand certainly.  When it comes to electrification, there certainly will be a full EV in Cadillac’s lineup in the future.  It is also however a matter of prioritization.  To be candid, I don’t believe there has yet been a car company that has really made a strong profit, out of any EV.”

Mr. de Nysschen says that he/Cadillac “aren’t a bunch of Luddites“, and that pure EV technology will come eventually, but he needs to focus on today’s profit margins (think traditional, gas-burning, small SUVs and crossovers).

He adds that basically Caddy has no desire to build a BEV any time soon, or to pay attention to global regulations, thanks to its standing inside GM.

“Cadillac has an advantage, we are part of General Motors, and we can draw on the resources of our parent corporation, and especially when it comes in the near term to compliance and regulatory issues, we do get bundled in with GM, and that means for us, we will focus on plug-in technology.”

…not exactly being a great corporate steward.

de Nysschen also weighs in on importing vehicles from China to the US (such as with the company’s lone planned import, the 37 mile, extended range CT6 PHV):

“When one makes a decision to import vehicles from China, you do so for one reason only – it’s because you don’t have manufacturing capacity to build the cars yet.  The regulatory environment in China means that you have a joint venture partnership; so every car you sell you share the profits.   Hence the reason it is better to build them where you have the full pie to yourself.”

Yahoo! Finance, Hat tip to ffbj!

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137 responses to "Cadillac Boss: “We Are Not A Bunch Of Luddites” On EV Tech, But Even Tesla Isn’t Making Money"

  1. Bailey says:

    Go right ahead a keep making those ICEs, I’ve never been a fan of Cadillac and can’t say I really care if they drop out of existence in the near future. #Dinosaurs.

    1. Danny says:

      I guess Acura, Infiniti, Lexus, Porsche, Volvo, Jaguar and Land Rover are all dinosaurs too? Or do you think maybe some of them rely on their parent companies to meet regulation as well?

      1. Sting777 says:

        As they’re losing sales to Tesla, yes.

        Tesla “losing” money by rapid investment into a future massively profitable battery factory. That’s my kind of “losing money”.

        1. jerryd says:

          GM wishes they could make the 27% margins the tesla S makes.
          Or the 100%/yr growth Tesla gets for spending that 27% growing the company.
          Vs GM the most known thing is they keep going bankrupt, making very bad decisions time and time again.
          That Cadillac didn’t come out with the Volt/ Bolt first is likely the biggest blunder of any car company in marketing.
          It could have been the most tech advanced Lux car company and then dropped the tech to Chevy.
          But instead they get creamed by trying to sell Chevy’s as Cadillacs.
          Why is this person still with Cadillac?

          1. mo says:

            Yup this boss doesn’t at all sound like a Luddite to me. Nothing to see here.

          2. ModernMarvelFan says:

            “GM wishes they could make the 27% margins the tesla S makes.”

            What is $10K profit a $35K pickup trucks?
            28.6%

            Now, you know why GM is selling so many pickup trucks…

            20%+ in a $90K+ price class isn’t uncommon at all.

            1. Thanh Lim says:

              Ummm… there is a tax on pick up trucks of Japanese companies. This is why they can sell it so high. If they let it float, it would be a different story.

              1. ModernMarvelFan says:

                BS.

                Show where the Texas Built Toyota Tacoma is paying extra tax or the US built Nissan Titan is paying the same tax…

        2. Scott says:

          Right!? It’s obvious that where Caddy is watching in awe from the sidelines, Tesla is heavily investing in infrastructure. 5 years will be very telling.

          1. Anon says:

            This totally explains why GM will not get involved in EV fast charging infrastructure to support the Bolt: they think investment is exactly the same as losing money.

            Corporate POV is so short term / short sighted. *sighs*

          2. SJC says:

            Cadillac’s annual sales is over 400,000 units. When Tesla sells 400,000 Model 3 cars per year, then people can compare.

            1. Sting777 says:

              Tesla sells 50,000 Model S at $100,000+ each.
              They’re already taking share from Cadillac.

              No need to wait for the model 3 to compete with GM and Ford.

              1. ModernMarvelFan says:

                “Tesla sells 50,000 Model S at $100,000+ each.
                They’re already taking share from Cadillac.”

                I think Cadillac has lost far more shares from Acura/Lexus/Audi/BMW/Mercedes Benz/Jaugar…

                And Cadillac doesn’t sell in the $100K+ market.

                It competes mainly in the $40K to $80K market segment.

                1. SJC says:

                  You have to be a REAL car maker, not just someone who started 5 years ago. More than 60% of the early Model S will have to have their drive trains replaced.

                  1. Pushmi-Pullyu says:

                    SJC said:

                    “You have to be a REAL car maker, not just someone who started 5 years ago.”

                    Which auto maker are you talking about? Obviously not Tesla, which started selling cars in 2008.

                    “More than 60% of the early Model S will have to have their drive trains replaced.”

                    I’m sure that will come as a great surprise to both Tesla Motors and to the majority of Model S owners. 😉

                    Now, if you had said 6%, and you were talking only about very early production units… then maybe.

                    1. sorry says:

                      They won’t be surprised, because they’ve been paying attention. Did you attempt to google “tesla drivetrain replacement” before replying “maybe 6 percent”?

                      http://www.greencarreports.com/news/1101153_two-thirds-of-earliest-tesla-drive-trains-to-fail-in-60000-miles-owner-data-suggests

                    2. Pushmi-Pullyu says:

                      No, “sorry”, I didn’t Google it, for the simple reason that I’ve seen this fallacious argument before.

                      We computer programmers have a term: GIGO; as in “garbage in, garbage out”. It refers to the fact that if the data you use to make your analysis is bad, then your analysis will be equally bad.

                      The article you linked to mentions the Consumer Reports survey, but instead of using the data from that, it uses data from a non-scientific, non-random online opt-in survey; methodology no statistician would accept as valid. That methodology can’t help but have a biased result; definitely a case of GIGO.

                      If you don’t understand, then Google for yourself why only random surveys are statistically or scientifically valid.

      2. Alan says:

        I seem to remember a small company called Amazon making a loss for at least it’s first 5 years also !

        Luddite !

        1. Three Electrics says:

          It’s projected that Tesla will turn a profit around year twenty. That’s four times and fifteen years longer.

        2. Amazon only started making profits recently, 20 years after it was founded.

          http://www.wsj.com/articles/amazon-posts-surprising-profit-1437682791

          1. Sting777 says:

            While it puts WalMart out of Business.

            1. ItsNotAboutTheMoney says:

              You’re assuming it’s putting WalMart out of business. I’d say WalMart’s adapting through their improved handling of their free Site-To-Store shipping.

              I see the same thing in GM, and I think they’re doing better than any of the other mainstream manufacturers, with an approach that only has high-capability PHEVs and long-range BEVs.

        3. Nick says:

          Actually Amazon has only ever made profit in one year, and that was last year!

      3. wavelet says:

        Volvo and Porsche are already selling plug-ins, and have announced more models. As soon as battery prices come down enough to support midrange pricing on mid-sized vehicles, you can bet there’ll be plug-in Infinity and Acura models as well (since Honda has announced it’ll be doing PHEVs).

        Jaguar is a dynosaur… and only exists to milk name snobs by selling them rebadged Fords.

        1. Birger says:

          Actually Ford sold Jaguar in 2008.

      4. Robb Stark says:

        Jaguar and Land Rover can’t hide inside Tata Motors because Tata Motors does not sell cars in Europe,China, or North America.

        1. Tom Moloughney says:

          Correct. We’re going to get to see what EVs JLR has been working on pretty soon.

        2. Trace says:

          Jaguar: For men who want to receive hands jobs from women they hardly know.

          The movie “Crazy People” ages ago.

      5. Daniel says:

        Danny: name as many luxury brands as you want. You put any of those car besides a model S and they look like rubbish. V6/v8, turbos? Really?.
        ICE cars aren think of the past.

    2. Mister G says:

      GM business plan..fail, bailout, fail, bailout

      1. ModernMarvelFan says:

        “GM business plan..fail, bailout, fail, bailout”

        Your comment style:

        Bash GM, rest, Bash GM, repeat…

        1. Mister G says:

          My GM bashing will end when I can go to a central Florida Chevy dealer and buy/lease Bolt EV…I like to put my money where my mouth is…what BEV do you drive?

          1. ModernMarvelFan says:

            “My GM bashing will end when I can go to a central Florida Chevy dealer and buy/lease Bolt EV…”

            I like to see you trading your 2016 LEAF for that 2017 Bolt then.

            What is that Chevy dealer’s zip code? I will an eye out for you and wait for you to put your money where your mouth is.

            “I like to put my money where my mouth is…what BEV do you drive?”

            I don’t drive a crappy BEV like LEAF. I drive a Volt and it has over 43K of EV miles out of 50K total miles.

            1. Peter O'Brien says:

              “I don’t drive a crappy BEV like LEAF”

              Please…. I have owned a Ford Mustang, a Ford Explorer and a Chevy Camero. My present Leaf is much better built. I guess by “crappy” you must be referring to the range. The Leaf does what it was designed to do very well. I don’t use a dump truck to commute.

              1. ModernMarvelFan says:

                Those other cars you mentioned are even “crappier” in other ways…

                LEAF is “crappy” in my book due to its slow 0-60mph time, poor performance in IIHS’s small overlap crash result and lack of battery cooling.

                Yes, the range isn’t great either, but it can work for some people so that is not my biggest problem with a “commuter” car. I do wish for more range.

                1. Thanh Lim says:

                  That’s exactly what I used it for. Commuter car as well as weekend car, tbh. We’ve used the ICE car a few days in the last 2 years, and that was because the items wouldn’t fit in anything but the minivan.

              2. evcarnut says:

                RITE ON!

            2. Mister G says:

              Volt, ok you get some credit in my book. I leased 2012 Leaf SV on September 17, 2012 for $328.99 month, $3000 down for 39 months and now have a 2016 Leaf SV, so I have put my money where my mouth is and continue to do so. If I can get a Bolt EV in central Florida I would consider returning Leaf. I’m at 33897..let me know ggslp71@live.com

              1. ModernMarvelFan says:

                “If I can get a Bolt EV in central Florida I would consider returning Leaf. I’m at 33897.”

                We will have to keep an eye out for 2017 Bolt when it arrives in show room then…

    3. evcarnut says:

      THEY ARE “TOTAL LUDDITES” IN EVERY SENSE OF THE WORD! THIS HIS WAY OF DEFENDING IT. ALL THIS “BS” HE IS TRYING TO FEED PEOPLE IS “HOG WASH” ANYONE WITH BRAINS WILL NEVER BELIEVE “THIS SUGER COATED BS” THAT HE’S TRYING TO FEED US! HE SHOULD BE AN ACTOR .FACT IS..,. HE LOVES & SLEEPS WITH “BIG 0IL”..===$$$$$$$$$$====FOR HIM!

  2. 2013VOLT says:

    Not surprising, Johan de Nysschen has been anti EV his entire career. What is unfortunate is that this cancer has been allowed into GM. A company that has been making great strides towards the EV movement.

    1. Sting777 says:

      These old geezers either retire or die, that’s what it takes.
      Global Warming and EV’s don’t need to be proven to the younger generation, they’re obvious.

      The Social Good is Obvious, the advantages are obvious.

      1. Bob A says:

        A guy named Planck said, “Science advances one funeral at a time.”

        Question here is are we talking about having to wait for de Nysschen’s demise, or Cadillac’s?

        1. ModernMarvelFan says:

          de Nysschen is the worst recent hires by GM in my opinion.

          1. Bill Howland says:

            This guy and that other “BMW IMPORT” should go back to Bavaria.

            I don’t buy Chinese Apples or Caddys.

            If the ct6 phev will only partially be made in China I’ll consider it. But totally Chinese, no , unless at half price or less.

            1. ModernMarvelFan says:

              Sounds like CT6 PHEV battery will be made in MI and electric motors will be made in MD…

              I think the engine will be made in the US as well. But it will be assembled in China and gets shipped back to the US. China is expected to be its leading market.

              1. Bill Howland says:

                Per Sven’s article, I wonder why GM is spending money sprucing up their Detroit Headquarters since GM is becoming China-Centric, in fact, it HAS to give China first dibbs at all the new products since it is in the inferior position in its bailout.

                Just as DeNysschen lies about the reason the ct6 PHEV will be built in China, so the increased investment and technology transfer to chinese companies will continue, until and after Chinese demands that all investment take place into their companies..

                GM apparently feels it can screw the old Daewoo and Holden home countries, not withstanding the bailouts its gotten from Korea and Australia. Of course, FORD is also giving Aussie’s the double wammy of closing down their operations also.

                I wonder if the Chinese have something against the old cadillac wreath. It will be interesting to see how much MORE is demanded of GM during the NEXT financial ‘crisis’.

                Do they have architectual plans for the new SAIC (oops GM) headquarters in China yet, or is that a mere detail?

                Maybe GM is planning for the day when the US consumer may be only able to afford used vehicles, and, increasingly they will have more and more forced dependence on their Chinese Masters.

                They’ll chauk it up to ‘international cooperation’. Uhhh, right…

        2. evcarnut says:

          And 0r which ever comes 1st….. l o l….. The sooner the Better!

    2. offib says:

      Did anyone tell the ex-Audi hack that there’s quite a difference between a company that’s 114 years old that has had all the resources it needed at its reach for decades, compared to a company that got its first factory in 2010 and continually expanded and invested in manufacturing to keep up with demand?

      Even if his self convinced words are true, he knows well that Tesla is more valued in the eyes of the public, more than any of his lineup.

    3. Michel says:

      I’m with you on this . After what they went through . They should have learn some thing and hired smarter executive.

  3. Eric says:

    This man is right, of course. When Kodak invented the digital camera, they were also right to shelve it and continue with business as usual. Analogue technology was quite profitable and there was no reason at all to suddenly become all innovative and maybe be less profitable with that. Same goes for Nokia: stick with what you know for as long as possible and it’ll be alright. After all, past successes are the perfect benchmark for the future and short term profitability is all that matters. Long term is for dreamers. Tesla is therefore bound to fail and Cadillac is quite right to follow the immensely successful Kodak and Nokia strategies in this.

    1. Oswald says:

      It’s funny Nokia is always brought in as an unsuccessful company yet they brought in over $1.2 billion in profit last year.

      1. offib says:

        And when they are allowed to make their own successful lineup with the Asha and Nokia X models, Microsoft terminates them in less than a year and claims it to its own Lumia lineup.

      2. Someone out there says:

        Sure, Nokia does a ton of stuff. Microsoft only bought the handset manufacturing part of it, which has gone from around a 50% market share to about 3%. Well done…

      3. Pushmi-Pullyu says:

        I think Blackberrry would have been a better analogy: Once the market leader in the smart phone market, offered for sale after losing most of its market, and now barely hanging on as a small niche supplier.

        Many companies have gone through periods of sharply declining sales, and have only recovered by concentrating on a different market or completely changing their business strategy.

        Another example would be Apple after the introduction of the IBM PC; they saw a loss of most of their market share over the next several years; both the Apple III and the Lisa were marketing failures. They only managed to hang onto an approx. 10% market niche with the Macintosh, and didn’t become one of the world’s most profitable companies until they introduced such products as the iPod and the iPhone.

      4. ModernMarvelFan says:

        Exactly..

        Nokia is currently the largest telecom equipment maker in the world…

        MS killed Nokia with its “reject CEO”…

        Although I do like Windows Phone OS (the new one windows 10, not 8.1)

    2. Sting777 says:

      You’re seriously using Kodak as an example?
      B School dropout?

      1. Pushmi-Pullyu says:

        In what way is Kodak a poor analogy for what’s going to happen to some current automotive manufacturing market leaders in the coming EV tech revolution? Kodak is a perfect illustration of what happens during every disruptive tech revolution. Looks very much like Toyota is doing that same thing right now.

        Perhaps you need to read up on what the term “Luddite” actually refers to, Sting777. Oh, and you can follow that with learning what happened to the Stanley Motor Carriage Co., maker of the once best-selling Stanley Steamer, during an earlier disruptive tech revolution.

        Amazingly enough, Sting777, it is possible for an autodidact to learn things which someone who went to an Ivy League school was never taught.

        1. Sting777 says:

          Because of it’s Massive loss of Market Cap, Market Share and it’s stock price collapse over the last 20 years.

          Were you born yesterday?
          Kodak is the perfect example of a film company that did not successfully transition to digital. You do know that Kodak was king of the film market? And that market is now dead?
          Nobody takes film pictures any more. You have heard of “digital photography”?

          1. Pushmi-Pullyu says:

            It’s amazing that you know all that, yet still manage to utterly miss the point.

            Reminds me of the response Ann Landers gave to a letter about a married couple who were both child psychologists, yet whose own child was out of control: “These people have been educated beyond their intelligence.”

          2. Trace says:

            Kodak is still in business and still makes film, development chemicals and darkroom paper. So does Fuji, Ilford, Agfa and others. It’s for the pro market. No they don’t cater to the cell phone selfie crowd anymore. But they are not dead.

            They don’t make cameras any more (even their digital ones, which were pretty good), or consumer products, but for pro photographers, they’re still in business.

            1. Pushmi-Pullyu says:

              Eastman Kodak went bankrupt in 2012. The current Kodak is what emerged after severe downsizing, divestment of all camera manufacturing, selling many or most of its patents, and reorganizing to cater to a specialized niche market. If you want to claim it’s the “same company”… then that’s an opinion, certainly not a fact.

    3. przemo_li says:

      No. Nokia did not loose due to Symbian. In fact biggest revenue was earned well into iOS “revolution” and even then Symbian grew more then Apple and Samsung combined!

      No. Nokia had to choose from their own successor to Symbian – MeeGo or MS WinP.

      MeeGo was ready. Could run Symbian apps. Was very modern. Could easily be sold by Nokia extensive partner network. And could accommodate any hw Nokia deamed attractive.

      WinP? No sellable phone for the next 6 months. No option to retain that extensive partner network, as everything needed to be designed for WinP. No option to retain good carrier relations due to Skype bundling with WinP. Stringent hw requirements set by Google.

      You know why Nokia chooses WinP? I don’t. But that 25mln bonus Nokia CEO got after ruining Nokia WinP sales so badly that MS had to buy Nokia phones department…. Those 25mln had nothing to do with that choice….

      So proper comparison would be if Cadillac announced that they will compete with superior EV tech by switching to Hydro… In 2022…

      1. Someone out there says:

        Man, I miss Meego. I loved my Nokia N900, still do but it doesn’t charge through the USB connector anymore so today I have a Samsung Android phone and I hate it! It’s so awkward to use, the N900 was much easier! It did things exactly the way I wanted to do things.

    4. Trace says:

      Umm, Kodak is still around. They just sell to the professional market, and Hollywood now.

  4. PVH says:

    He is probably factually true when he says that no car maker has ever yet made profits selling ev’s but not investing right now in developping an EV for release within 2-3 years max. is IMHO a bit strategy mistake which I hope he does not do. I mean specially for a luxury brand. For selling cheap cars there is more room for discussion (one could wait for battery prices to go down a bit).

  5. Someone out there says:

    Yeah, and digital cameras are no threat to Kodak’s business… whoops!

    1. evcarnut says:

      Not Anymore! L M A 0 ……..

  6. ggpa says:

    He is making excuses because he does not want to admit that his brand is not the right one for EVs.

    I am amazed at how successful BMW i8 is. It is very expensive total, and also expensive for what you get. And it is successful.

    Imagine if Cadillac made a deal to sell the same vehicle under a caddy badge. It will not sell well.

  7. Pushmi-Pullyu says:

    Head of Cadillac, Johan de Nysschen, is quoted as saying:

    “…I don’t believe there has yet been a car company that has really made a strong profit, out of any EV.”

    Hey kids, let’s have fun with creative accounting! Let’s pretend that Tesla, which makes about 23% gross profit on selling the Model S, isn’t really profitable, because they’re re-investing all those profits into expanding the company. Wheee! Isn’t this fun?

    😀

    I see GM’s last reported gross profit margin was only 13.59% (link below). So it’s certainly understandable why a GM spokesman would try to spin the facts to pretend Tesla has not “really made a strong profit”.

    https://ycharts.com/companies/GM/gross_profit_margin

    1. DonC says:

      I’m not sure if you’re being purposefully misleading or don’t understand the financials. I’m thinking it’s the latter. Tesla is most definitely not profitable. It makes a gross positive margin on each car it produces, but that margin can’t cover the expenses of developing, marketing, and selling the car. On a GAAP basis Tesla loses money on every vehicle it sells. It’s just that it would lose more if it sold fewer units or sold those units for a lower price.

      A DVD probably costs Microsoft $.05, but Microsoft’s profit isn’t the difference between the selling price of Office and the cost of the DVD. Most of its costs are in development.

      GAAP captures all the costs, not just the production costs.

      1. Three Electrics says:

        Indeed; retained earnings are negative two billion–and that’s not even accounting for capital investments of dubious worth.

      2. sven says:

        Indeed, Pushmi-Pullyu doesn’t understand basic accounting principals and is confusing net income with gross income(profit).

        First off, a company is profitable when it has net income (the bottom line). A company with gross profit (income) can have have either a net income (profitable) or a net loss (unprofitable) for the year. Gross profit/loss is sales minus cost of goods sold. Net income/loss is gross profit/loss minus SG&A expenses, R&D expenses, depreciation, amortization, interest, and taxes. Retained earnings is the sum total of annual net income or loss since the company was incorporated (like a running total).

        Net sales
        – Cost of goods sold
        ———————
        = Gross profit (loss)
        – Selling, general & administration expenses
        (ie: marketing, salaries, rent, warranty costs, Supercharger expenses, service center expenses)
        – Research & development expenses
        ———————————
        = EBITDA (Earning before interest, taxes, depreciation, and amortization
        – Depreciation and amortization
        – Interest expense (cost of borrowing money)
        – Tax expense
        ——————-
        = Net income (loss)
        ===================

        https://en.wikipedia.org/wiki/Net_income

        http://www.investorwords.com/article/gross-vs-net.html

        Pushmi-Pullyu said:
        “Let’s pretend that Tesla, which makes about 23% gross profit on selling the Model S, isn’t really profitable, because they’re re-investing all those profits into expanding the company. Wheee! Isn’t this fun?”

        “Re-investing profits” to pay for building the Gigafactory or adding a production line to make the Model X IS NOT AN EXPENSE ON THE INCOME STATEMENT,. These expenses are “capitalized,” moved from the income statement to the balance sheet where they are added up and become a capital asset, which is depreciated (expensed on income statement) over the course of it useful lives. The cost of the Gigafactory would be depreciated (expensed) straight line over 40 years, it’s useful life.

        For example, if Tesla spends $5,000,000,000 building the Gigafactory, it does NOT deduct a $5,000,000,000 construction expense on its income statement. Tesla deducts/expenses none of the $5,000,000,000 until the Gigafactory is placed into service. Once the Gigafactory is placed into service, then Tesla can deduct a $125,000,000 depreciation expense on its Income Statement every year for 40 years.

        1. Ambulator says:

          Nice explanation. I’ve tried, but that looks much clearer than what I could manage.

        2. Pushmi-Pullyu says:

          sven said:

          ” ‘Re-investing profits’ to pay for building the Gigafactory… blah blah blah… IS NOT AN EXPENSE ON THE INCOME STATEMENT… blah blah blah… moved from the income statement to the balance sheet… blah blah blah…”

          sven: Many years ago, I taught myself enough accounting to do double-entry bookkeeping. So I don’t need a lecture on the difference between gross profit and net income. However, unlike you, I didn’t lose sight of what the words “profitable” and “unprofitable” mean when the average English speaking person uses them. You can insist until you’re blue in the face that when we choose to use words which have technical accounting definitions, we are “only” allowed to use them as defined by accountants. Fortunately, most people including myself are under no such constraints when writing comments.

          1. sven says:

            Self taught? Oy veh. Like I said, a company that has gross profits (income) can have a huge net loss (unprofitable) or it can have a net income.

            Re-investing profits affects cash-flow on the Statement of Cash Flow, and does not affect the Income Statement which calculates net profit and loss, except for the depreciation expense taken on the Income Statement. Since the Gigafactory hasn’t been placed in service, no deprecition expense has been taken on the Income Statement.

            1. Pushmi-Pullyu says:

              The title of this article includes the phrase “…Tesla Isn’t Making Money”. That’s just wrong; Tesla makes plenty of money selling its cars. That is what most people mean when they say “profitable”.

              It’s pretty funny that you’re telling me that I don’t know what I’m talking about when I say “Tesla is making a profit,” yet you confuse that with net income.

              Just answer one question, sven: If Tesla was not making the capital investments it needs to, to grow its production at a rate of about 45-50% per year, then would it have a positive net income?

              If the answer is “Yes”, then Tesla is profitable, despite your attempts to control the conversation here.

    2. ModernMarvelFan says:

      You are comparing the gross profit of entire GM lineup against the gross profit of Tesla which ONLY sold cars that average more than $90K in price?

      Talking about biased selection.

      Why don’t we compare the gross margin on TEsla against GM pickup trucks and SUVs only?

      Do you even think that Model 3 would even remotely having a chance to crack 20% gross margin?

      1. Pushmi-Pullyu says:

        ModernMarvelFan asked:

        “Do you even think that Model 3 would even remotely having a chance to crack 20% gross margin?”

        The question is irrelevant. Elon already said they only hope to make about 15% gross profit on the Model ≡.

        1. ModernMarvelFan says:

          “Hope” is the key word here.

          We know that Model S averages for more than $90K price. Let us say it is $90K and Tesla makes 25% gross profit on it. That is a cost of $67.5K.

          Now, let us say that Model 3 that starts at $35K will sell for average of $45K.

          15% of $45K is $6.75K or a cost of $38.25K. If that is the case, then Tesla is “losing” money on the base $35K version as options won’t cost that much cost to the car.

          Now, let us assume it is favorable that 15% is achievable at $35K. Then it would cost $29.75K to build.

          Now, let us go back to look at Model S again. if the typical S cost $67.5K to build (90D). Let us strip off the extra motor and extra 30kWh of battery. Base S70 would cost at least $57.5K to build (since everyone claims that motors are cheap and Tesla battery is cheap so $10K should be plenty).

          Now, tell me how Tesla can go from $57.5K to $29K by just making it slightly smaller?

          Smaller doesn’t save much labor or material cost.. Sure going from AL to steel will help, but you are only talking about thousands, NOT tens of thousands in body cost here. That $28K has to come from somewhere….

          Maybe I don’t have the right estimate or information. But I find that hard to believe.

          Maybe the so called $35K version would be a “loss leader” which will be offset by the higher profit top trims..

          1. Pushmi-Pullyu says:

            ModernMarvelFan asked:

            “Now, tell me how Tesla can go from $57.5K to $29K by just making it slightly smaller?”

            That’s a complex question; a “Did you stop beating your wife?” question.

            Nobody at Tesla ever said they were gonna make the Model ≡ at roughly half the cost of the Model S by merely making it a bit smaller. What someone at Tesla (Elon?) actually said was that the Model ≡ will be about 20% smaller than the Model S. Somehow, people have gotten it into their head that this means it will merely be a slightly smaller version of the Model S. That’s not what was said, that’s not what was meant, and frankly it puzzles me that anyone would confuse one for the other.

            What Tesla spokesmen have said is that the Model ≡ will use a lot more steel in the body, rather than aluminum. And as we all know, Tesla plans to get significantly cheaper battery cells from the Gigafactory. So that is just two examples of how Tesla plans on significant savings when making the Model ≡. I’d think it would be self-evident that Tesla will be using a clean sheet design to make a significantly cheaper car, yet somehow, some people can’t seem to grasp the fact that no car maker goes about designing a new car model half the price of another by taking the existing model and trimming away bits here and there.

            Critical thinking seems to be in shockingly short supply here. >:-/

    3. Pushmi-Pullyu says:

      I see I got DonC, Three Electrics, sven, and ModernMarvelFan to all line up to tell me I’m wrong, wrong, wrong! Well, we already knew those four are dedicated Tesla bashers, but it’s nice of them to out themselves here.

      They are playing creative accounting games, just like the Cadillac spokesman. They can shuffle the numbers around all they like, play games with which column they put a figure in, or claim we should compare the profit margin of just a few cherry-picked GM vehicles to Tesla’s overall profit margin. None of these attempts to spin the truth matter, because they can’t hide the fact that Tesla is a highly successful company which is growing its market and sales much, much faster than any legacy auto maker. Tesla’s success has confounded very nearly every investor “analysis” made in the past. Tesla’s performance, as a company, has lept from remarkable success to astounding success. Of course, that’s no guarantee that Tesla will continue its near-perfect string of successes, but there is certainly no sensible reason to think they’re going to slow down soon.

      This FUD is the same B.S. as assertions made at investor troll sites such as Seeking Alpha, and I think most or all of it was copied from such sites. These are blatant and completely dishonest attempts to put a negative spin on a company’s performance. They’re not real-world observations or arguments. Just like the claims that Amazon.com was “losing money”… Yeah, right. About 99% of all the businesses in the world would love to “lose money” like that!

      Now, as to those (hopefully few) who actually believe such nonsense, rather than having a hidden financial motive for bashing Tesla: Those who have “learned” enough about finances to believe that investing money in future growth is “losing” money… those people have lost sight of reality.

      *Ahem* Well, down off the cheerleader soapbox for now. Tesla isn’t perfect, by a long distance. But we shouldn’t have to put up with all these half-truths and outright lies in comments following Every. Single. Article. which discusses how successful Tesla Motors is.

      Go Tesla!

      1. sven says:

        Pushmi-Pullyu said:
        “I see I got DonC, Three Electrics, sven, and ModernMarvelFan to all line up to tell me I’m wrong, wrong, wrong!”

        Even a broken clock is right twice a day. You are not broken clock or even half a broken clock.

        1. Bill Howland says:

          It never bothers the guy that he is clueless, he just keeps going. Most people would be embarrassed. Since it never bothers him don’t let it bother you guys, and just consider it comic relief. He usually doesn’t even understand why he is wrong, so, his function here is mainly to increase advertising revenue due to the added clicks he produces.

      2. ModernMarvelFan says:

        I have been accused of being Tesla “cheerleaders” before. So I guess I can’t win here.

        You should have insisted that I am a Pushmi-Pullyu basher instead. You would have been more likely to be correct.

  8. Mister G says:

    Hello…you’re a bunch of luddites that got bailed out…maybe that is the GM business plan fail, bailout, fail, bailout, fail, bailout LOL

    1. sven says:

      But it’s the bailout that GM received from China that forever changed and controls GM’s future.

      Below is a good article about how GM sold the “golden share” in it’s joint partnership with Chinese automaker SAIC during the financial crisis, and the ramifications and repercussions of that decision.

      http://qz.com/594984/the-secret-history-of-gms-chinese-bailout/

      1. Djoni says:

        This is somthing very interesting!

      2. Josh says:

        Wow, great read. Thanks for sharing.

  9. Jacked Beanstalk says:

    They’re too busy making ugly, overpriced road barges to bother with EVs.

  10. pk says:

    Goes to show that not every South African automotive executive has vision. Musk, yes. This guy, not so much.

    He comes from 17 years of Audi culture. Don’t expect him to change his world view anytime soon.

  11. David Murray says:

    I think what he said actually makes good sound business sense from a perspective of near term profitability.

    Also, I have to wonder to a certain extent the type of customer that buys a Cadillac, do they even want plug-in cars? When I think of brands like Cadillac and Buick the first thing that comes to my mind is “old people car.”

    So I think Cadillac will have a harder time selling EVs that other brands like BMW or Audi.

    1. Michael Parker says:

      “…good sound business sense from a perspective of near term profitability…”

      I think you hit the nail on the head. The issue is that the vast majority of the current crop of auto execs have no incentive to look forward to the future, because by the time the EV tipping point happens they will be long-retired. All they care about is lining their pockets today, tomorrow be damned.

    2. JeffD says:

      Old people have a tendency of dieing though. Eventually the young people that are wanting to buy EVs are going to be old people. I may not blame them for not moving as quickly as Tesla because they want to maintain some near term profits, but it seems like they are standing still and sacrificing the long term profitability of the company.

  12. pjwood1 says:

    At least DeNysschen provided candid remarks. Ones reaffirming his business unit’s financial goals. To me, he thinks more like a Ford guy, believing image can be created on the cheap. Too bad there’s a crap-ton of GM tech, upon which he could climb into Tesla’s 23-28% gross margin sand box.

    Is DeNysschen even big enough to say “Hey GM, I need a ground up BEV chassis.”?

    1. ModernMarvelFan says:

      “Is DeNysschen even big enough to say “Hey GM, I need a ground up BEV chassis.”?”

      Yes, he can.

      GM will say, hey are you paying for the BEV chassis development from scratch?

      That pretty much would shut up the guy who is a finance/business major.

      That is what happens when a “bean counter” is picked to run the business.

    2. Nix says:

      He would have to take it to GM’s board and get their approval. He doesn’t have the power himself.

      Just like how Bob Lutz himself had to convince the board to green light the Volt.

      But before they can sell the board on the idea, they have to want it themselves. That is what is lacking.

  13. KUD says:

    Look at Audi, he is gone and Bev’s are being worked on. Enough said.

    1. DonC says:

      Sort of silly POV. I am not a fan of de Nyssche, but he’s obviously good at what he does. He took Audi from zip to arguably the top of the German luxury brands. As for Audi working on EVs since he left, Audi is only working on EVs now because it got caught cheating on the emissions with its diesels and has no choice. If it hadn’t gotten caught Audi would still be pushing its diesels.

      I’d love to see a BEV Cadillac, but it’s hard to argue that the lack of SUVs is the larger immediate problem. Cadillac as a brand is a train wreck, and a BEV isn’t the major reason why. When you have better performance than BMW but can’t sell against it, your problems won’t be fixed with one model no matter how good it is.

      1. ModernMarvelFan says:

        “He took Audi from zip to arguably the top of the German luxury brands. ”

        He was never head of Audi worldwide.

        He was head of Audi of Japan from 1999 to 2004 (Audi of SA before that).

        He was only head of Audi of American from December 2004 to June 2012. Audi in America was well on its path of turning around before 2004.

        Back in 2001 to 2004, Audi’s 4 series was well competitive against BMW. S4/RS4 were coming out and so are other SUV/Crossover already in the work.

        In fact, his reign of Audi of American overlapped a significant portion of VW diesel scandal where Audi was pushing for so called “clean diesel” in the US as well.

        What did he do at Infiniti for 2 years? Nothing.

        What is the first thing he did at Cadillac? Remove the Wreath around the logo and move HQ to NYC…

  14. Tim F. says:

    I fail to see how GM couldn’t fit in CT6 PHEV production into Hamtramck. They already have a strong electrified presence there with the Volt. It would be trivial to produce gas and PHEV CT6 on the same line. By importing them from China, they are purposely trying to stifle the market through increased lead times and the stigma of a Made in China label.

    1. HVACman says:

      Adding a new vehicle to a production line is NOT trivial. It takes $$$$$ to re-tool to add a product to a line and there are limits to the tooling (as well as staff training) – you can’t blend full-size and compacts on a single line. I find it amazing that auto makers can make as many products as they can now on a single line. D-Mam already has 5 vehicles on a single line!

      per GM –

      “Detroit-Hamtramck (D-HAM) is among General Motors’ most complex Manufacturing Assembly facilities in North America building five vehicles on one production line. It is GM’s only plant located in Detroit with a total footprint that spans into two cities – Detroit and Hamtramck. Detroit-Hamtramck is the epicenter of electric vehicle production producing all of GM’s extended-range electric vehicles.”

      1. Tim F. says:

        My point was the gas CT6 is already being built in Hamtramck. I agree it wouldn’t make sense to build just the PHEV version there, but when you already build both other PHEVs and the gas version at the same plant wouldn’t it make sense to build the PHEV version of the same car there?

    2. JeffD says:

      The real reason is that they figure they will sell more in China than they will here in the States. If they build them in China, they save more on avoiding China’s high import tariffs than they spend on importing to America.

    3. ItsNotAboutTheMoney says:

      They’re building the CT6 Plug-in Hybrid in China because:
      – China’s environmental policies are leading to a rapid increase in plug-in sales. It’s now the biggest PEV market and is going to be a big PHEV market. Low oil prices are killing PHEV sales in the USA.
      – China’s protectionism makes imports expensive, which gives them a competitive advantage against Tesla. In the USA they’ll have a lot more price competition with Tesla. In the USA they will, at least, have the advantage over other EU-compliance PHEV that they’ll have a drivetrain that allows more electric-only driving, but China is now their main focus, as they struggle to compete in the USA. (In my opinion Cadillac’s aggressive designs narrow their appeal amongst luxury car buyers, and they could do with taking a different approach for cars and SUVs).

  15. Realdb2 says:

    I don’t blame auto companies for selling products old technology at huge profit margins. I blame the people who buy them.

    1. Mister G says:

      BINGO..that’s why I leased 2016 Leaf SV for $321 month with $1500 down for 36 months to create demand for BEV production, innovation etc..

      1. ModernMarvelFan says:

        And you overpaid… LOL

        But I am NOT surprised based on your posts here..

    2. MikeG says:

      This is where regulation can come in. A requirement that all ICE vehicles be plug-ins as the PHEV technology is mature and is irresponsible for not using it everywhere.

      Increasing the gas mileage requirement is another way to get there, but it is more of a Rube Goldberg path. Eventually the automakers will run out of options for ICE vehicles to meet the mpg requirement without making all PHEV models.

      1. Mister G says:

        Fossil fuel industry will lobby congress to not tighten regulations that squeeze ICE business. You do realize that if a Republican wins white house you can kiss goodbye tax credits for BEVs.

        1. ModernMarvelFan says:

          “if a Republican wins white house you can kiss goodbye tax credits for BEVs.”

          Do you realize that current tax credits for BEVs were written into law when Bush was in office?

          Guess not…

          1. ModernMarvelFan says:

            “The federal tax credit for plug-in vehicles originated with bipartisan support at the end of the Bush era. It was thus done in a Republican-controlled White House, but democrats including Obama did support it.”

            http://www.hybridcars.com/does-the-7500-plug-in-car-tax-credit-need-reform/

            1. ModernMarvelFan says:

              “Section 30D originally was enacted in the Energy Improvement and Extension Act of 2008. The American Recovery and Reinvestment Act of 2009 amended section 30D effective for vehicles acquired after December 31, 2009. Section 30D was also modified by the American Taxpayer Relief Act (ATRA) 2013 for certain 2 or 3 wheeled vehicles acquired after December 31, 2011 and before January 1, 2014.”

              1. Nix says:

                You seem to have missed the entire rise of the Tea Party, and the massive sea change that has occurred in the R’s party since Bush was in office.

                Since then everything has changed. Now they have stated their intention for getting rid of any direct consumer incentives, and to fund ONLY research, and eliminates or zero’s out funding for everything else. All under the guise of leaving everything to the private sector:

                “Our budget says the Department of Energy’s research and development work should
                focus solely on breakthrough innovations, and the Department should leave the
                application and commercialization of new technologies to the private sector.

                The federal Government is filled with energy programs that either produce little useful
                results or perform a task that can be better handled by the private sector. Therefore, we propose reforming or outright eliminating a number of programs.

                The budget rescinds all unobligated balances from the president’s stimulus green energy programs. The government cannot recover taxpayer dollars from failed projects like Solyndra, but it can protect taxpayers from being on the hook for future boondoggles. ”

                http://budget.house.gov/uploadedfiles/fy16budget.pdf

                1. Nix says:

                  But you know this, because here is yet another example of the direction of R legislation. This one is from a link at the bottom of your own link you posted:

                  http://www.thetruthaboutcars.com/2014/02/could-tax-reform-be-end-to-ev-incentives/

                  Earlier this week Representative Dave Camp (R-MI), Chairman of the House Committee on Ways and Means, released the Tax Reform Act of 2014. This proposal would make sweeping changes to a very long and complex U.S. tax code. Included in the proposal was a provision to repeal the tax credit for new qualified plug-in electric drive motor vehicles, known as Internal Revenue Code Section 30D or IRC 30D. Or as most of us know it “the $7,500 EV credit.”

                  1. ModernMarvelFan says:

                    Yes, GOP has been turning for the worse…

                    But the original statement:”You do realize that if a Republican wins white house you can kiss goodbye tax credits for BEVs.” implies the president can change the existing law which is false.

                    Congress writes the laws… GOP is already in charge of the Congress.

                    1. Nix says:

                      There is a Check-and-Balance on the Congress’s ability to enact laws. Congress can pass laws until they turn blue in the face, and the law will never be enacted if the President veto’s it.

                      R’s have not been able to enact their fiscal agenda because the current President has stopped them. If that last hurdle falls, R’s can pass their fiscal agenda through budget reconciliation with a 50% vote in both houses (with Vice President Palin breaking any tie in the Senate).

                      The US House (the only branch of Congress that can initiate spending authorization bills) has already signaled their intention. So he is correct when he states that if the Presidency changes parties, that the last roadblock to the House passing their agenda will be gone.

                      Are you now just debating on how long the kiss goodbye will last? Because you spent a whole lot of time trying to pretend that R’s wouldn’t kill the federal incentive. And now your argument seems to be that the new R president wouldn’t be able to do it instantly on his own. But that was never argued by anybody. Does the technical question of how long the kiss goodbye lasts, really justify your posts trying to prop up the old Republican party’s role in passing the original legislation?

  16. Josh says:

    So if near term profitability is the only thing holding the tech back, shouldn’t he be driving Caddy really hard on solving that problem?

    I think it is a easy excuse not to solve hard problems. This is the road to irrelevance.

  17. Mark C says:

    I guess he’s afraid of how the Cadillac EV will compare to the Tesla Model S, X or 3.

    I wouldn’t want to be the first American manufacturer to import a Chinese vehicle, let alone a Chinese Cadillac.

    50 years ago, Cadillac was the luxury brand to own. He’s going to help both himself and Cadillac as a brand become the butt of every joke imaginable. How the once mighty have fallen, not from risking greatness, but by foot dragging into an age that will increasingly be electrified.

    1. sven says:

      Off topic, but the passenger-side falcon-wing door is sagging in the Bloomberg link you posted. I’m assuming those are the new Tesla designed FW doors, and not the original Swiss/German designed FW doors.

  18. Cadillac “aren’t a bunch of Luddites“
    Ah, yeah they are.

    1. Spider-Dan says:

      I know it’s tempting to read an article like this and call Cadillac “Luddites,” but let’s put things in proper perspective when it comes to production luxury vehicles:

      Acura EVs- none existing, none in near future
      Infiniti EVs- none existing, concept car only
      Jaguar EVs- none existing, none in near future
      Land Rover EVs- none existing, none in near future
      Lexus EVs- none existing, none in near future
      Lincoln EVs- none existing, none in near future

      Cadillac was one of the first luxury marques to bring an EV to market, and they are getting ready to release their second EV. I would save the term “Luddite” for companies like Honda or FCA.

      1. Bill Howland says:

        +6 Spider-Dan

        (for the six marques that have NOTHING)

        I don’t care for DeNysschen, nor the fact that he sends me advertising literature every week to buy another Cadillac (but never mentions they even MAKE the ELR), but Cadillac THANKFULLY put the ELR in production before that genius became the head.

  19. Nix says:

    It is sad when a CEO doesn’t know the difference between selling cars at a profit, and using all of a company’s profits off each profitable car sale to rapidly expand a company.

    But Cadillac hasn’t seen rapid expansion like Tesla is experiencing for decades, so it isn’t surprising that he doesn’t recognize massive growth when he sees it.

    1. ModernMarvelFan says:

      Did you just promote Johan de Nysschen to CEO? =)

      I hope you meant “chief of Cadillac” and CEO was “loosely” used in this case.

      I certainly hope he will never make the CEO of GM for sure.

      This guy hasn’t done anything at Infiniti before he comes to Cadillac. Even at Audi, the turn around of Audi started before he took charge…

      1. Nix says:

        I mean it as him holding a Corporate Officer level job act GM. Lot of companies have multiple CEO’s Like CEO of Finance, CEO of Sales, etc. Some companies even have multiple CEO’s that share the top position (Oracle). So I mean it in the general term of one of a company’s many CEO level employees.

        It might be sloppy use of slang on my behalf, but that was my intent.

        http://www.gm.com/content/gmcom/home/company/aboutGM/GM_Corporate_Officers/johan_nysschen.html

        1. Spider-Dan says:

          I personally don’t think it’s a big deal either way, but the “CEO of Finance” is normally just called the CFO (Chief Financial Officer). Similarly, the “CEO of IT” is called the CIO (Chief Information Officer).

          Saying “CEO of Finance” is like saying “President of Los Angeles”; while it might be technically accurate in certain rare situations, it’s unwieldy and should be avoided when possible. It is uncommon for a company to have more than one Chief Executive Officer, and Mary Barra is GM’s.

          Besides, it’s a lot easier (and safer) to just say “head” of Cadillac.

          1. Nix says:

            Spider-Dan,

            I absolutely understand your point, and I fully realize that I’m using sloppy slang.

            But what do you call it when the CEO, the CFO, the CIO, COO, CSO, and all the rest of the C[insert_letter]O’s all meet and decide something?

            The slang is to say the CEOs met and made a decision. You could say the “The C-level Executives”, which would be more technically accurate. But slang by definition isn’t technically accurate, and “CEOs” is used in place of the more technically accurate “C-level Executives” the same way “y’all” is used instead of the more accurate “you all”.

  20. Ian says:

    Funny how Cadillac has been subconsciously branded by everyone as a car “old people buy”. Just a tired old brand trying to recruit the next generation of old people. Not that being old is bad, but being a Cadillac might not be good.

  21. Koenigsegg says:

    Cadillwac

  22. We turned in our leased Volt at a Cadillac dealer (1 of three in the area this dealer group has). It’s Friday 4-5 p.m. I mentioned “It sure seems quite here tonight” The sales person says “No this is normal”. “Normal????” I asked??? “We are an early dealership” the sales person responded “Our customers will be in bed soon”

    It’s more than subconscious.

  23. Spec says:

    Meh. Caddys are for Blue hairs and pimps. Not exactly EV buyers. Let Caddy continue its decline into oblivion.

  24. JimGord says:

    . . and the number of Cadillac SuperCharger locations is …..?

  25. will2372002 says:

    This is the same guy who told the Cadillac dealership owners in the US “I would rather sale fewer cars at a much higher price then sale more cars at a lower price and we will start with the CTS and the Escalade.” Once I heard this I cancel my order with them and ordered a Tesla I will never buy another Cadillac in my life. They are so over price now every time I see a new Escalade now I just smh “so over price”