GM CEO Says Cadillac ELR is “In the Same Postal Code” as Tesla

4 years ago by Eric Loveday 45

CEO Dan Akerson Says Cadillac Will Eventually Compete With Tesla

CEO Dan Akerson Says Cadillac Will Eventually Compete With Tesla

Occasionally we criticise General Motors CEO Dan Akerson for some of the comments he makes, and this is one of those occasions where again it seems Mr. Akerson doesn’t quite have a grasp on the industry.

The Cadillac ELR is Not the Cadillac That Will Compete With Tesla

The Cadillac ELR is Not the Cadillac That Will Compete With Tesla

In speaking with the Detroit News, Akerson stated that he remains skeptical that US buyers will come out in mass to purchase pure electric vehicles.  Then, Akerson moved on to Tesla.

This Akerson quote makes next-to-no sense to us whatsoever:

“We’ll sell more Volts and lose less money on the Volts than they’ll lose on the Model S.”

We’re not sure what to make of that one.  Akerson seems to be playing loose with words here, but what he’s actually admitting is that General Motors does lose money on the Volt.  We’ve yet to see proof that Tesla loses money on each Model S.

Akerson added that almost all startup automakers fail, a known fact actually.  He spoke of Fisker and then seemed to lump Tesla into the same category before admitting that Tesla has established itself and that General Motors will ultimately take aim at the startup automaker.

“Does anybody even remember Fisker? I mean, there were a number of them; they are all gone.”

“If you want to compete head-to-head with Tesla, and we ultimately will, you want to do it with a Cadillac.”

This last quote from Akerson again comes off as showing that he’s not really in touch with the going ons in the electric segment:

“But I do think when the ELR comes out late this year, early next — it’s certainly in the same postal code as Tesla, but now we’re going to move up.”

What’s wrong with this statement?  One’s essentially a plug-in hybrid, the other is pure electric.  They’re not in the “same postal code” in our minds.  Sure, if the ELR was a 200-mile BEV with a $70,000 price tag than it would certainly be in Tesla’s postal code, but it’s not that and, as such, it’s not a Tesla competitor.

When prodded by the Detroit News, Akerson wouldn’t comment on when the next-generation Chevy Volt would launch.

Source: Detroit News

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45 responses to "GM CEO Says Cadillac ELR is “In the Same Postal Code” as Tesla"

  1. George B says:

    Wow, what a headscratcher.

    1. kdawg says:

      Yeah, I think I need more coffee, before I can try to decipher Akerson.

      But my first impression is he’s confused about EV shoppers. People are not going to cross-shop a Tesla Model S and a Cadillac ELR. I love both cars, but if I had $75K to burn, I would buy the Tesla. If the Cadillac is priced at $55K, it makes it more appealing, but that’s a 20K difference, not the same postal code to me.

      I think the ELR will be cross-shopped more with the BMW i3. Both luxury cars, both smaller, both within the same postal code, IMO.

      1. MTN Ranger says:

        Unfortunately for GM, I think the ELR will be priced like the Model S but will compete with the much cheaper i3 ReX. It will almost certainly be the low selling (i.e. exclusive) car they promised.

  2. Josh says:

    Wow. If you compare his comments to comments from Musk, you can clearly see which one is involved in their companies devlopment. His lack of understanding is even more confusing since he made the “special task force” to investigate Tesla.

    That task force is either just as uninformed as him, or have yet to make any headway in the “research.” Maybe I should offer to write a Tesla report for them… Or they could just spend a few hours on TeslaMotorsClub.com.

  3. John F says:

    When high quality fuel efficient imports began selling in the US, GM’s management failed to see the market need. Over decades, they continued to produce large inefficient products with planned obsolescence. GM lost market share. They ultimately needed a government bailout to stay in business.

    Now here come the electric vehicles. Tesla, the startup automaker, brings out it’s first vehicle and it outscores all others on safety. Although its sales numbers are small, Tesla has to increase its production to meet its order backlog. Already, GM is loosing market share in the luxury car segment. Now Tesla is beginning to sell globally. Also, Nissan is increasing production of the Leaf and expanding sales globally. Is GM’s management going to respond by producing complicated unprofitable vehicles (like the Volt according to the CEO) or compliance cars? This is not going to go well for GM. They could be one gas crisis away from their next bailout.

    1. scott moore says:

      Exactly, why pay a great deal of attention to what GM says between bailouts….

    2. Yves Laurin says:

      +3

  4. Bob HOdgen says:

    Tesla has changed the game. Your cars are already obsolete.

  5. Ryan says:

    In the 1980’s, 90’s, 00’s; the fact that GM/FORD could not clone, copy, or reproduce a Honda motor so they could get the same reliability and fuel economy either shows they are or were completely incompetent; or just didn’t care.

    1. John F says:

      It took GM 10 years to come up with the Saturn. It was GM’s answer to the ‘Japanese Car’ problem. The Saturn was very successful, but GM eliminated it during their consolidation. Now Nissan uses the Smyrna Tennessee plant (where Saturn was produced) to make the LEAF.

      1. Aaron says:

        Ironically Saturn used Honda engines in some of their models.

      2. ItsNotAboutTheMoney says:

        Saturn was initially successful, but by the time of the bankruptcy the tech had been incorporated into other makes so there really wasn’t the volume to support the differentiation.

      3. JIm H says:

        The Saturn factory was in Spring Hill TN, Smyrna is about 45 miles away. Down from 8000 in the Saturn days, some 2000 GM Spring Hill employees currently assemble the Chevy Equinox, plus engines and parts for other GM plants. Nissan’s Smyrna plant began production in 1983 and now employs over 7000.

  6. David Murray says:

    The ELR is a nice car, and I’m sure it may steal a few buyers away from Tesla. If the price is significantly lower than a Tesla, it may steal more than a few customers. But when he says “postal code” I have to wonder if he is talking about the price or the car, or both. Obviously GM can price the car the same as a Tesla if they want to, but they can’t compete head on with them.

    I also still don’t understand when he says the ELR will not be mass-produced. Does that mean it will be hand-built like a pre-production car? Being that we’ve already been told it will be assembled on the same line as the Chevy Volt, I don’t understand the statement.

    1. Eric Loveday says:

      The takeaway point is that Akerson is really rather clueless. ELR will be a limited production vehicle. It will be built on the same line as the Volt, but we’ve been told it’s a “once and done” vehicle…which implies one Model Year only. We’ll see if that turns out to be true.

      Here’s my take: ELR production has to cease when they move to next-gen Volt. When’s that next-gen Volt coming? It was supposed to be Model Year 2015, but it won’t be. Maybe 2016 or even 2017. ELR production could continue until then if there’s sufficient demand. However, GM insists ELR is a limited production vehicle.

      1. Rick Danger says:

        Why does ELR production have to cease when they move to the next-gen Volt? Why would GM spend all that money to tool up the ELR for only limited production? If GM still loses money on the volt, after tens of thousands of sales, how much are they going to lose on the limited production ELR?

        Elon Musk must sit in his office and laugh his ass off.

  7. Taser54 says:

    The thing to take away from this interview is that Cadillac will have a pure EV. Look to the ELR as a snapshot of the Luxury the future EV will provide.

  8. David says:

    Gotta call it like it is.
    The ELR is an over priced, money losing Volt with lipstick.
    His comments explain how they could come out with such a lame vehicle.
    Tesla has little to worry about.
    Looks like GM is well on the path to be the Blackberry of the auto world. For those that don’t know, blackberry is on the verge of disappearing.

    1. Taser54 says:

      The blackberry comparison does not work. Blackberry was a disruptive company akin to Tesla, not GM. When the phone industry adjusted to Blackberry’s product, it rolled out competing products leveraging its manufacturing/ design strengths and crushed Blackberry.

      1. kdawg says:

        David says the ELR is over-priced.

        You must know something the rest of us don’t, since pricing has not been announced AFAIK.

        1. Fred says:

          I read somewhere that some guy by the name of Dan Akerson says the ELR will be in the same “postal code” as the Tesla Model S. I take that to mean it will be in the same neighborhood price wise.
          They need a better car. Not lipstick.

          1. kdawg says:

            Here’s what was said

            **Akerson wouldn’t say when GM will bring its next-generation Chevrolet Volt to market. “But I do think when the (Cadillac) ELR comes out late this year, early next — it’s certainly in the same postal code as Tesla, but now we’re going to move up,” Akerson said.**

            I don’t think he was talking about price. I think he was talking about the cars themselves.

            I agree that they need a more electric car (think bigger Spark EV w/a 200 mile range). And possibly a sports car to compete w/the Tesla. However, I think the ELR is much more than lipstick. If the ELR had the same battery/motor the Tesla does, I would easily buy it over the boring Tesla design.

  9. Dr. Kenneth Noisewater says:

    Dude is _delusional_, the only thing in the ELR that comes close to a Tesla is the price. Does he even drive these cars? Lutz must be chuckling.

    I think GM has the engineering chops to do a damn good, affordable EV that can compete with Tesla. However, I think their management is mostly inbred, stupid, and out of touch, so they’ll continue to hobble the engineers the way they’ve done for 50+ years.

  10. Mark Hanson says:

    Perhaps by “same postal code” he meant the ELR will be assembled in near Freemont California;-)

    1. Eric Loveday says:

      Good one Mark…we didn’t think of that angle…build an ELR in Cali…would never happen but maybe Akerson thinks that’s where they will be built 🙂

  11. Rob says:

    Well, apples and oranges are both in produce section, so in a way he is right:)))))

  12. Jim says:

    I think Mr. Akerson should be reminded that unlike GM, Tesla didn’t go bankrupt and get bailed out by the American Taxpayer. And, if his goal is to “lose less” on each car, I guess we will be bailing his butt out again.

    1. kdawg says:

      In 105 years, and maybe a few depressions/recessions, let’s talk about Tesla’s history (assuming they still exist). And maybe you should be reminded how many people GM employs vs. Tesla.

  13. ItsNotAboutTheMoney says:

    Rather than saying the Volt is a money-loser, I read the Volt comment as dodging a Volt profitability question with a snide remark that Tesla is still losing money.

    GM is profitable in the USA and profitable globally despite still working to stem the European bleeding. Especially given the financial pressure from the CARB ZEV mandates, the Volt’s first target is to lose less than the alternative cost of buying ZEV credits.

    1. Ian Shepherd says:

      Are you Dan Akerson? I’m as confused by what you’re trying to say as I am by his quotes in the article. Tesla is not “still losing money” – it’s profitable, it has paid back its government loans way ahead of schedule, and it’s currently expanding into Europe. I don’t know about GM’s profitability, but as the article shows, the Volt is clearly not.

  14. Dan Frederiksen says:

    I’d say it’s a nonsensical statement to avoid talking about their unfavorable situation.
    It is however true that Tesla is losing money on each model S. They can’t even cover their running costs let alone pay back development costs. And that’s at 20000 cars per year.
    Tesla exists entirely due to investor enthusiasm.
    The stock is currently at 180 and their debts paid off but if not for the zev credits they would have a billion dollar debt and be at 20 or less.
    What happened was so fortuitous it’s pretty bizarre. Q1 was a 70million dollar loss in line with the usual Tesla Motors megalosses had it not been for the zev credit sales and some creative accounting giving the faint illusion of profitability which caused the stock to explode in the tension between buyers and shorters.

    It’s like Dumbo flying. Against all odds 🙂

    And to make it even more crazy, Tesla’s market cap could eclipse GM’s in the not so distant future. They don’t seem to be at all aware that they need to be profitable so the losses are going to continue but because of the enormous stock price, they can raise money to pay for development of an unlimited number of cars and ride the growth wave from investor enthusiasm. It’s basically a scam or ponzi scheme but it could legitimately work.
    I’m not sure Model X will double their sales but any significant growth will appear to investor enthusiasm as vindication and keep the bubble going.
    My recommendation, given their piss poor business model and the ridiculous stock price, would actually be to raise more money while they can and let that pay for faster introduction of additional models thus furthering the illusion of rapid growth.
    They raised a billion plus like it was nothing and that was back in the 100 stock price days. Say they could raise 2bn more they would be awash in money to burn and continue their money losing business and give the illusion of unlimited life thus raise the stock price even further 🙂
    One obvious model I would add would be an optimized roadster successor which could be developed dirt cheap because it’s a simple car. Only 2 doors and small, not based on model S. They could call it Tesla Light or Lumina if they don’t want it to be seen as a successor to the roadster. Or Model CC (coupe convertible or compact)
    That way they cheaply have 3 models with X and maybe give the frenzied stock market the excuse it hungers for to let Tesla market cap eclipse GM.
    Then Akerson’s committee will panic 🙂

    1. Richard Joash Tan says:

      BULLSHIT! Tesla did not lose any money on the Model S!

      1. Taser54 says:

        Language.

      2. ClarksonCote says:

        Tesla’s profit to date is only from selling ZEV credits due to a mandate in California. Without this, they would presently be losing money, i.e. they would’ve recently reported a loss instead of a profit.

  15. Red HHR. says:

    What is a Post Office?

  16. Lindsay Patten says:

    Would it still be such a stretch if he meant it would sell to customers in the same postal code? Are there not likely to be people with the same level of affluence as Model S buyers but with a more conservative mindset that would prefer to buy a Cadillac, and prefer an EREV/PHEV probably using the same logic that attracts people to the Volt?

  17. Dan5 says:

    I tend to disagree that Tesla is losing money on every car, more or less his statement is accounting symantics. Tesla is make money on each car sold, but the money is being funneled to other activities such as R&D, building the supercharger network, paying off debt, etc, etc.

    Now if you actually look at the margins and what it costs Tesla to build the Model S,
    It looks like on average they are making 20,000 per car without any CARB credits, with CARBs its much more. It should also be noted that it took Tesla less money to design the technology fot the Model S than it did for rhe Volt. Last report i heard was somewhere between $75-175 per kwhr glr the Tesla battery, and they are charging over $400 per kwhr

    Now, look at a Volt, take the Malibu, calculate the margin, throw in 10 K for the batteries and supplimentary systems and you get a Volt. Now calculate the margin based on the sale of that car. The 10 K is pretty accurate based on what GM is currently paying, sure you can get a replacement cheaper, but they take the original and refurbish it.

    Now we get the the ELR, well my projections are that it may sell 1000- 2000 per year if they are lucky. It has nothing to do with GM, it just has to do with the market. Hybrids such as the Volt are not cross pollinating other markets, the sales numbers are exactly what you would expect for the price range. There is no reason to think the ELR will not follow suit.

    Tesla is in the Cat bird’s seat. Their clientel seems to be techies, car enthuasists, greenies, people who want something new, or dislike regular cars due to reliability issues, people who dont want to deal with car dealerships, people with money, people concerned about safety, people who want the rocker children seats, people who hate the smell of gasoline, and people who love to shop (massive trunk space). Its taking a little market share from each one.

    Thats what is wrong with the plug in hybrid strategy, its only for people who would purchase the same price range.

  18. Zip Codes are a US postal concept, they have little interpretation when delivering to a global market. So many great destinations don’t have a zip code!

    On remembering…
    Tesla influencing GM drivetrain development is nothing new … the orginal Tesla Roadster was the inspiration for KickStarting the Volt Concept back in 2006. The Volt was first shown in 2007 and first sold in 2011. For comparison, Tesla Roadster production peaked in 2007-2009, and ended in 2011.

    Ref: Thanks to Bob Lutz
    http://www.thedailybeast.com/newsweek/2007/12/22/bob-lutz-the-man-who-revived-the-electric-car.html
    Also, http://en.wikipedia.org/wiki/Chevrolet_Volt

    A Volt-based ELR sold in 2014/2015 is not very significant compared to 2011. In the same timeframe as ELR reaches market, Tesla will be introducing the Model X SUV and Nissan the eNV-200 Van. (EVs with larger passenger capability & increased load flexibility).

    Many major OEMs have said they are working on a EVs with a 150-200 mile range for 2016/2018 period. This means we should be seeing OEM concept unveilings fairly soon? To create a concept, an OEM has to commit to major engineering decisions and narrow concept specs to lower-risk technologies. Some OEMs have invested in evolving technologies and can scale designs faster than other OEMs. The financial side of vehicles design can be just as complex as the hardware engineering. Going from concept to production scale in 3-4 years vs. 5-7 years can be as big a differentiator as creating a vehicle with superior quality.

    For consumers, more choices means finding an EV matching their needs becomes easier.

    1. Dan5 says:

      Current reports say that GM is backing off the 200 mile EV claim in the near future.
      Lets see how the others stack in the EV race:

      Ford has nothing, in fact they get most of their EV parts from an outside vendor. The focus EV is a retrofit compliance car

      Chrysler- Fiat, nothing huge, small EV

      Toyota- Rav4 ev using tesla supplied partd

      Nissan/renault- Leaf

      Bmw- i3, a small car

      Audi- canned their EV program

      Mitsubishi- MiEV, a small car

      To produce and release it in that timeline, the big guys should already be showing off the concepts to the press.

      Not to mention the fact the only 2 have actually built ground up EVs, so the rest lack the experience, so it will take them longer.

  19. “I turned down all of the loans for electric cars and for advanced propulsion. I just said, ‘We’re done with that,’ ” Akerson said.

    That’s the real news in this story.

    1. Dan5 says:

      A little historicalrevision by Akerson. They did not go for the ATVM loan because in 2008-2009 and 2010 GM did not neet the criteria to get approved snd would have been denied.

      Likewise applying for it now would most likely result in non- approval. The only ones who may get the loan is Ford or Nissan

  20. Future EV Driver says:

    This is sad. I had hoped that Danny A was going to be the right guy to carry GM forward.

    Oh well better get new replacement on board who really understands EVs and is behind them 100%!