Cadillac’s EV Pivot Might Be Last Ditch Effort To Save The Brand

JAN 16 2019 BY WADE MALONE 66

The luxury electric crossover will be sold globally and priced for wide reaching sales.

Late last week, Cadillac was appointed the technological leader for General Motors.  Just two days later, Cadillac president Steve Carlisle surprised the automotive press with a teaser of the first vehicle on the new BEV 3 platform. This new electric vehicle platform will be “highly versatile” with options for “front-wheel drive, rear-wheel drive, all-wheel drive.”

“We can build CUVs, SUVs, and cars from one singular architecture.” Says Carlisle, “Cadillac will lead the corporation towards a zero emissions future by becoming GM’s lead electric brand.” This was not our first indication that Cadillac’s newly appointed president was interested in “new propulsion systems.”

Cadillac Canada’s managing director Hoss Hassani says the brand is looking for volume sales for the new EV. This means a more “affordable” luxury price:

Bringing out a $110,000 or $120,000 (CAN) vehicle is not our idea of transformation. Cadillac, being a luxury brand, will be looking to introduce Cadillacs that are vehicles that are going to have a certain level of reach, and the heart of the market is not a $110,000 or $120,000 car.

For those of us south of the Canadian border, the new electric SUV should start well under $82,000 USD. But this move is not merely a growth opportunity. It is as a survival tactic.

Cadillac needed a stronger brand identity.

Weak yearly sales in the United States have hovered around 150,000 in recent years. Cadillac missed out on the crossover craze and never embraced hybrids. Previous plug-in hybrids like the ELR and CT6 PHEV were sales duds. Earlier attempts to re-invent itself have found little success.

But growth in the Chinese market has been the brand’s sole bright spot this decade. Because of China’s focus on increasing electric vehicle sales, the move makes sense. If done right, the Detroit automaker can build a strong reputation among plug-in buyers at home and abroad. Within GM, it likely serves a practical purpose of moving the EV program towards profitability more quickly in addition to meeting Chinese compliance goals.

GM CEO Mary Barra hinted this week that the luxury brand is on the right track:

One of the things that’s going to make Cadillac, Cadillac again is leading in innovation and technology. We’re very intent on continuing aggressively to accomplish that … This is just the tip of the iceberg.

However, GM President Mark Reuss isn’t sugar coating the situation:

We don’t have any chances left with taking Cadillac to a really new place. This is pretty much it. So we really have to hit the ball here. It’s my job to make sure we do.

All I’m focused on is what we’re doing right now… and getting momentum back in Cadillac.

Source: Autotrader

6 photos

Video Description From The Wheel Network on YouTube:

Cadillac furthered its recent product blitz today with the reveal of the brand’s first EV. This will be the first model derived from GM’s future EV platform. GM announced on Friday that Cadillac will be at the vanguard of the company’s move toward an all-electric future.

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66 Comments on "Cadillac’s EV Pivot Might Be Last Ditch Effort To Save The Brand"

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“Cadillac’s Pivot To EVs Might Be Last Ditch Effort To Save The Brand”

Yeah, I kinda picked up on that, reading between the lines, from IEVs’ first report on that. GM has been pretty adamant in refusing to go all-in on making plug-in EVs, and they farmed out the entire powertrain for their first BEV, the Bolt EV, to LG Chem & LG Electronics. Those appear to be pretty strong signs of a deep reluctance on the part of GM to commit serious resources to making and selling plug-in EVs in large numbers.

The fact that GM would suddenly announce a commitment to convert entire badge to electrified vehicles pretty strongly indicates to me that GM sees this as a last-ditch effort to rescue the Cadillac line. Why else would there have been a sudden major switch in corporate strategy?

* * * * *

“Cadillac missed out on the crossover craze…”

Well, maybe they can correct that with a new line of plug-in EV crossovers. Just because Cadillac hasn’t offered any crossovers in the past doesn’t mean they can’t or won’t in the future.

GM made BEVs before the Bolt EV. Remember the Spark EV and the EV-1?

Okay, fair point, I should have been more specific: The Bolt EV is GM’s first truly mass-produced BEV. The EV-1 was only a limited production “test market” vehicle, and the Spark was a mere low production compliance car.

I would argue that the Bolt isn’t really mass produced.
I wanted to test drive one, couldn’t find a dealer who was planning having one, or cared to tell me more than “yeah…we don’t have any of those, but I’ve got a great deal on a used Silverado”

So I bought a Model 3 instead.
Never going back.

I had the same deal here in Columbus Ohio… I wanted to at least test drive the Bolt before buying my Model 3. BUT NOPE. “We only get 3 a month and they are bought as soon as the VINs become available, sign unseen.”

Come on GM! Only 3 per month for a market that is the 14th largest city in the US? COMPLIANCE VEHICLE.

The Ev-1 was such a hit and so well received GM saw the writing on the wall with regards to the potential impact on their ICE production, transmissions, dealer profitability with maintenance and repairs, the impact to big oil, etc. Once they came to that realization they rapidly killed the car, tore them from the hands of owners/lease holders, and destroyed them. GM was 20 years ahead of Tesla and could’ve been the global leader in change, instead their corporate greed took hold and now they’re paying dearly for it.

I won a bet last year between production numbers of the ATS and the Model III. Rubbed it in when Cadillac stopped making the ATS. I stopped short of saying this to the other party, but watching their sales numbers for a year, it was truly obvious that Cadillac is dwindling. GM’s problem will be supply chain for EV parts, if LG isn’t selling them everything. And, since we know GM wasn’t profitable with the BoltEV, GM has no choice. Where are they going to get battery contracts for 200,000 BEVs?

I think it’s a last-ditched effort by execs to “electrify” the investors with a grand vision of future, instead of electrifying the lineup 🙂

I have no way of knowing what’s going on in GM, but what we can see with the naked eye is the Bolt hasn’t had updates, lineup diversification or derivatives for either 2018 or 2019. Also in the US the Bolt, for a pioneering car, has been borderline invisible, even inside the likely target audiences, such as e.g. electrified people or Chevy dealerships 🙂

Why are we to assume that the CG rendering of e-Cadillac will change the way things are done?

Do Not Read Between The Lines

The Bolt never had enough volume to be anything more than a placeholder. It’s always been about what their next step would be.

The next step to failure

“Well, maybe they can correct that with a new line of plug-in EV crossovers. Just because Cadillac hasn’t offered any crossovers in the past doesn’t mean they can’t or won’t in the future.”

I think they can. But they haven’t pulled it off quite yet. The XT4 and this new Cadillac EV seem like decent efforts but we will have to wait and see. 🙂

“…..“Cadillac’s Pivot To EVs Might Be Last Ditch Effort To Save The Brand”

Yeah, I kinda picked up on that, reading between the lines, from IEVs’ first report on that……”.

Of course, it helped that I FIRST mentioned this twice yesterday, before IEVs, that MARK REUSS hinged the ENTIRE DIVISION on success or failure of this Cadillac model.

HAHAHA!

Must Have:

1) Compelling range & performance specs priced within 18% of ICE Cadillac.

2) Franchise dealer network trained & motivated to sell & support EVs.

3) Access to a robust convenient and reliable fast charge network for those occasional long distance trips.

Guaranteed limited success if any one of those must haves are not fully present.

Looking forward to the arrival of the new Cadillac EV and hope it’s a home run for Cadillac.

My guess is priced same or lower than existing Cadillac ICE, or a model positioned well within their existing lineup.
Performance shouldn’t be a problem, range to be seen.

Mary Barra has stated people want EVs but not at a price premium over comparable ICE. GM stated their pack prices should be at $100/kwh by 2021 coinciding with Cadillac’s first EV timing. That price should allow GM to build a compelling EV at the same cost as an ICE.

Then why limit sales to Cadillac, the only reason I see is that is not actually true and they need to sell it as a Cadillac as they can’t reach a mainstream price point.

More short term thinking from GM. I think GM is limiting to Cadillac because they have learned not to expect high volume sales, and they want a product that can be immediately profitable at low sales volumes. There is also perhaps some old Detroit hubris that causes them to believe they can compete head-to-head with Tesla and be Tesla killers in the premium electric vehicle market. If GM had truly committed to a ‘Zero Emissions’ electric future, they could have developed a ‘high sales volume’ strategy by trying to be the leader in value – offering competent EVs at an attractive price consistent with high volume sales. If they had committed the resources necessary, they would have increased their sales volumes and lowered their ‘per unit’ fixed and development costs and established a real (profitable) EV business model. However, it would have required them to lose (more) money in the short term in order to build volume, EV manufacturing know-how, and reputation. Interestingly, this type of strategy was not available to Tesla several years ago, and Elon admitted as much during the Model 3 unveiling three years ago. Tesla didn’t have the financial resources and manufacturing assets in place, and… Read more »

Or they can;t reach mainstream volume with current suppliers.

CDAVIS… Good list. Here is my assessment of how well GM / Cadillac will do: (1) Compelling range and performance priced within 18% of ICE: The one item they have the best chance of meeting – although I would not at all be surprised if GM prices too high. (2) Franchise dealer network trained and motivated to sell & support EVs: GM has limited ability to influence this with the current dealership model. More importantly, the independent dealers know that their bread and butter comes from ICE sales and servicing ICE vehicles. They will be the LAST people to embrace an all-electric paradigm. (3) A robust convenient and reliable fast charge network: This is likely to be an utter fail. The absolute best thing that GM can do at this point is to try to negotiate something with Tesla to use and support their Supercharger technology/network for GM offerings. The likelihood of this happening is very close to zero due to pride and hubris. The next best option for a company like GM is to offer their EV customers the free use of loaner ICE vehicles for road trips. That could happen. The worst – and most likely outcome –… Read more »

@TwoVolts said: “CDAVIS… Good list. Here is my assessment of how well GM / Cadillac will do…”
——————

@TwoVolts that’s a good assessment that is *not* inevitable but certainly likely based on past GM history.

Thing is that each of my listed “must haves” is doable by GM it’s just an issue of conviction on GM’s part.

For example, if GM was highly committed to EV transition it could under the existing dealer franchise agreement modify how dealers participate in New EV sales profits & EV Service Departmet profits so to offset the inevitable downstream loss off ICE Service Department business.

How? Example:

1) Allow franchise dealer to participate in a larger back-end take for each New EV sold. For ICE sold the dealers are often selling at near or below net cost (including operating overhead) as price for privilege of getting the downstream ICE Service Depart business and used car CPO businesses.

2) For EVs GM can develop some type of EV owner “service subscription” program with creative tag-along EV owner benefits (think Costco membership) which the EV selling dealer gets a forward cut of for life of original owner owning the car and subscribing to the subscription.

Another US problem is a large portion of the Cadillac demographic is watching too much Fixed News who is telling them bad things about EVs. The early Volt market as you recall was bringing an entirely new base into the brand. Much of that base has moved on to the Tesla Model 3 or other EVs. The Volt was small but a really great EREV. I think the Bolt fits a nice niche too. I wish Cadillac well, I am just afraid they have a lot going against them in the US and European markets. Maybe China market will be enough to keep it going.

Disagree with you Mark: I’ve bought 5 EVs including one Cadillac EV, and I’m very underwhelmed by this product. Perhaps it is more impressive in person, but photoshopped it looks like a Monstrosity. They wisely put Carlisle in charge – don’t know if he is going to be any good – but he can’t be any worse than Ev – Hater DeNysschen. (They’re moving the head of Cadillac BACK to Detroit – Now how much money did they waste moving their Headquarters TWO TIMES????). Since they spent a fortune either designing and/or paying Royalties to Toyota Subsidiaries for the VOLTEC designs, and now they are TOTALLY DISCARDING them, to me shows these people are Clueless. BEVs need 2 things: I should know since I have owned 2 of them and drive much more than the average American: 1). Plenty of Range so that you can go someplace on weekends. 2). Some kind of facility that does not greatly inconvenience the driver – DOUBLY true for the typical Luxury car buyer who doesn’t want to be put out. That’s why they buy Cadillac in the first place. Plenty of Range demands around 500 miles of battery capacity, or an unbelievable amount… Read more »

cadillac must talk and get feed back from ELR owners in order to be succesful.

All twelve of them???

Just ditch Cadillac, which is very dying like its demographics. Replace it with Saturn or Pontiac.

Lol

Opinionated with no facts.

Do Not Read Between The Lines

Yes, since they only seem to care about China, they could just ditch Cadillac and pump up Buick.

Cadillac is doing well in China as well.

Oooh. Saturn is an interesting idea. They used to only sell at fixed price like Tesla.

Until supply greatly exceeded demand and then some dealers started to “deal” again.

Replace a dying with two dead? What kind of logic is that?

I think GM has a real opportunity to succeed if they focus on long range electric luxury cars sold in mainstream quantities. Right now, there is only 1 mainstream EV, so countering the Tesla Model 3 with a more comfortably outfitted Cadillac (perhaps similar to what Lucid tried to make) could really help them take off.

“Last Ditch Effort”
There is no evidence for this statement.

“We don’t have any chances left with taking Cadillac to a really new place. This is pretty much it. So we really have to hit the ball here. It’s my job to make sure we do.”

Really? I don’t that’s a stretch at all considering this statement.

Clearly not a stretch, but if I had editorial input here (as I did at one time at a couple of computer magazines), I would have found another way to phrase it. “Last ditch effort” is too close to sensationalism. Even just going with a straight quote, e.g.

Cadillac exec on EV push: “This is pretty much it”.

Actually, I tried a headline almost exactly like that before this one. But it did not come across correctly. Instead, it seemed to indicate that this single EV model was “pretty much it” and nothing else was coming. Which is not true, since it is just the “tip of the iceberg” according to Barra and the brand has plans for CUVs, SUVs and sedans. So it became necessary to add context so that it was not misread. Then, the character count became too large for our home page and google news. I even tried using baseball metaphors, but it was still to vague and lost keywords that I needed for search optimization. Limitations in character count while trying to include keywords for google to pickup on is an annoying process lol. So I needed to pare it down to best represent the statement. I came up with “might be the final effort to save the brand.” or “might be last ditch effort to save the brand.” Considering GMs efforts for 2 or 3 decades now to reinvent Cadillac, I felt last ditch was the most appropriate. “Final” sounds like they’ve given up and this is a last horrah. “Last ditch”… Read more »

I thought it a perfectly reasonable assessment of the situation, and even with a ray of hope, not all last ditch situations end in tragedy for the defenders. Their backs are against the wall, the general is rallying the troops, the bugler is bugling loudly and then… they are overrun, well in this case they will be, but not always.
(In addition it set me up for my wheel in the ditch line.)

Tesla’s success has been helped by the flaccid, ineffectual, response of legacy auto, and this move by GM is just another indication of that response. Weak, but with Pomp & Circumstance:
https://www.youtube.com/watch?v=Vvgl_2JRIUs.

“We don’t have any chances left with taking Cadillac to a really new place. This is pretty much it. So we really have to hit the ball here.”

That is a lucid assessment. It applies quite broadly.

“…really new place…” that does not say “last ditch effort”.
When Barra says “last ditch effort” then I would believe it.

So Tesla’s Models S/3/X might have softened Cadillac sales? Customers once lost take much more than a copy of the competition to get them back.

Performance and handling, Tesla has already mapped that space (see YouTube drag races.) Range and utility, Tesla’s SuperCharger network has 24×7 access versus ‘business hours only’ dealers. Augmented driver aids, Tesla calls theirs autopilot while the rest have let perfect be the enemy of good enough. Scaleable and built-to-order, Tesla only sells that way versus “You WILL like our cars!” As for fit and finish, it won’t get the groceries.

The real Cadillac killer are the demographics of their existing customers versus Tesla buyers. Cadillacs are great for the geriatric while Teslas are the favorite of younger, upward mobile buyers. That is the prime demographic but short of someone with a chauffeur or driver, the Cadillac demographic is not long for this world.

Tesla Model S and X average age buyer is 54. Average American Cadillac owner is 58. Not a huge difference.

Average Age of Model 3 owner is 43. Average Age of Chinese Cadillac owner is 34. Cadillac sells about 33% more cars in China than US.

Google is your friend.

@Robb Stark said: “Tesla Model S and X average age buyer is 54. Average American Cadillac owner is 58. Not a huge difference…”
————-

That is good news for Cadillac… it means they have more a perception challenge… which is an easier thing to fix… although there is some statistical truth to support that perception. Often perception exaggerates reality especially when it comes to public opinions.

I found this of interest:

https://brandongaille.com/16-cadillac-demographics/

Will be sold globally?
ROFL…
Honestly GM, do you know what day of the week it is?
You got out of Australia (Holden)
You got out of Europe (Opel/Vauxhall)

Where is your distribution?
Where are your Dealers/Sales Outlets?
Where are your Service/Support Centres?

You are going to have to start again in Europe and Australia (as a minimum). Do you think that dealers will want to invest their money in you after what has happened?
Caddy does not have the cache that it has inside N. America in the rest of the world.
Sorry, GM but I think this is not going to take off UNLESS you copy the Tesla model. Then it is your money at risk but for what volumes? You have basically zero street cred here.

Another Euro point of view

Sadly quite true.

Cadillac sells 33% more cars in China than US. It has a significant dealer network in Europe.

GM didn’t leave Australia. It stopped manufacturing there. Tesla doesn’t manufacture in Australia either.

Do Not Read Between The Lines

Right. GM backed out of Western Europe. But they still have some Chevrolet dealers, although just selling the Camaro and Corvette. They have some Cadillac dealers.
So they could re-enter Europe with electric vehicles, both Cadillac and as Chevrolet.

“….Cadillac sells 33% more cars in China than US….”.

Yeah everyone says that but I keep asking the question, since GM is only a 49% ‘partner’ in the Manufacturing there, what kind of profit do they make on every vehicle, compared to the profit the Chinese company makes?

Of course, if they pay slave-labor prices, it is no doubt marginally profitable for GM. Seems like the trend is to MAKE 100% of GM vehicles in China. I should brush up on my Mandarin to read the new owner’s manuals.

I certainly agree that GM needs to create a new badge to sell EVs in Europe, if not a new badge for its EVs worldwide.

There certainly should be a good market in Europe for GM EVs, especially ones like the Bolt EV. Too bad that GM is selling that only as a very overpriced car with very limited availability under the Opel/Vauxhall badge.

Past time to circle the wagons.

Not to quote StarTrekJohn, but, he could be right. “Too little, too late”.

The last Caddy president tried to remake Cadillac into a decades-old Audi. Major missteps and very little innovation. CT6 should have been XT6. A decade ago. Moving corporate to NY is the exact opposite of making quick agile decisions.

GM never advertised or promoted PHEV and never embraced EV really. Leapfrog efforts against the likes of Toyota totally missed the EV revolution.

This is a GM desperation move not a Cadillac one.

I hope they resurrect CT6 in the US. It is a great car.

We disagree Loboc: I test drove one (the PHEV CT6), and it drove like a Land-Yacht – just like their other ICE models.

Compared to what? I find the ‘V’ models to be pretty tight and the CTS to be a well-handling car for an executive sedan. Did you engage sport mode at all?

I am an owner (four months in) not a test driver.

I applaud GM and Ford for committing to electric vehicles and making the cuts to pay for the transition. But sugar from these two OEMs often comes with a lot of vinegar, like focusing on trucks and SUVs. Or, like giving the Volt development group a bulky-heavy Camero frame to work with, or trying to make Cadillac edgy by designing a car with [wait for it…] edges. Their respective admissions that they are abandoning sedans and compact cars as such a broad class will surely put them out of that business. And they have condemned all of us to a ceaseless [senseless?] 5 years of truck commercials. Now, the head of Cadillac has pre-saged the fragility of his line. Reminds me of Saturn. My point is I am just not sure Detroit gets it. Lets hope these elephants can dance.

Do Not Read Between The Lines

To shareholders that vinegar is the malt vinegar they want on their fries.
You might want ketchup or mayo, but they don’t think like you.

I’m not convinced of true commitment from GM. I don’t see any commitment from Ford.

I hate to quote StarTrekJohn because most of his posts are Toyota-fanboi, but,… “Too little, too late”.

GM’s effort to ‘leapfrog’ Toyota totally missed the point of the EV revolution. Toyota is not the competition any more. Heck, they are in worse shape than GM for the future.

This is not a ‘Cadillac last ditch effort’ it is a ‘GM desperation move’. Half-way efforts of preserving legacy cars/trucks is not going to cut it. Stop making new gas-based anything!

Changing Cadillac into the EV brand is going to be tough. The Cadillac ship is pretty big even though the sales are not. Dealer motivation, especially in the US, is going to be more effort than building compelling EVs.

Any car manufacturer that is not at least 50% EV lineup by 2025 is history. The writing has been on the wall for a decade or more. Futurists aren’t looking decades down the road any more. It’s more like a half-decade.

Oh Cadillac you got a wheel in the ditch and a wheel on the track. Save the brand, which is fading into the sunset, I don’t think so, Though electric caddies will be a nice swan song for this opulent brand, whose time has past.
Now they can go silently and quietly into that good night.

This is a terrible sign for GM! Cadillac is already failing and connecting this “millstone “ to their EV future all but ensures a disappointing outcome. How bad must things be for Mark Reuss to give that quote? Almost a give up statement. Reviving the Saturn Brand at least sounds a bit new and fresh, but likely not enough so to succeed. US legacy manufacturers will never succeed without creating separate brands with dedicated Dealers that actually try to sell EVs. Of course those Dealers may not want this due to the low service revenue.

Legacy manufacturers will struggle in the years ahead, not just because their EVs will underperform dedicated EV manufactures, but because they simply can’t quit ICE vehicles. All of those ICE factories, ICE suppliers, Labor Unions will prevent success. All of their ICE based R & D and IP will ultimately become worthless. GM will be producing really awesome “typewriters” for customers that would prefer slick laptops and tablets. I cannot see a path to survival.

Let’s hope it works. Otherwise it will be the Cadillac of EV failures.

Where’s this 20 ev models by 2023 GM

1 for us, 19 for China. (of course, these will be made by GM’s majority ‘partner’.)

Over the Holidays I saw the same His-n-Hers GMC truck commercial every 10 minutes, but not one Bolt commercial. That tells you how committed GM is to EVs.

Cadillac should just stick with cars no more SUVs trucks anything like that just cars sedans coupes what Cadillac are known for smooth driving luxury automobiles..

If the Cadillac ELR is any guide, the result will be lackluster at best.

GM is dead they just don’t know it yet.

I wonder if any of the big automakers can compete with Tesla in the EV market. People are not lining up to purchase EVs, they are lining up to purchase Teslas. Not because of just the Tesla name, but because Tesla is hi-tech silicon valley cool that makes good looking, fast, sexy, hi-tech cars. You can’t just electrify your existing vehicles, it’s not what people want. Also, if gas prices remain low as they are now, that lessens one of the benefits of going EV. As far as GM goes, I think using Cadillac as the main EV branch is the best thing they can do. People who think positively about the Cadillac brand will spend a lot on a car. These cars need to be expensive to deliver the features that can compete with Tesla. I think where Cadillac could have a big hit is with a big luxury EV SUV. As far as the other automakers, I wonder if they need to create a new EV branch, that can be fun and cool like Tesla. A “Saturn-ish” brand that has a young tech vibe. Problem with that is, it’s an expensive risk. But someone has to beat Tesla… Read more »