Here’s Why The Cadillac ELR Is Not A Failure

JUL 16 2014 BY ERIC LOVEDAY 54

Cadillac ELR Makes An Appearance At The Geneva Motor Show

Cadillac ELR Makes An Appearance At The Geneva Motor Show

Cadillac ELR - Geneva Motor Show 2014

Cadillac ELR – Geneva Motor Show 2014

“Is it too early to call the ELR—at least in sales terms—a failure? Or is it time?”

Asked Motor Authority, who then stated:

“…having a two-year supply of anything on hand seems like bad business.”

More than 1,500 ELRs were in inventory at the time of publication, with Cadillac selling ranging between 41 and 97 units per month so far this year.

We see this quite a bit now, where various news outlets are saying the Cadillac ELR is not a success, but what’s overlooked is this previous statement from Cadillac senior vice president Bob Ferguson:

“The manufacturing for this vehicle will be limited. We’re saying, ‘Get in fast and buy it. We’re only going to make so many, and for so long.”

What Cadillac did with the ELR is to jam lots of production into a limited timeframe so that the production line could resume its normal activities as quickly as possible.  Since the ELR is a limited production vehicle, it will only be on the normal production cycle perhaps once a year, and GM had allow for dealers to stock 1 or 2 units at the 530-odd participating Cadillac dealers in the United States

It can be custom ordered, but Cadillac’s intention was always to produce perhaps 1,000-2,000 or so ELRs all in one lump, then to rely on those units satisfying demand until the next limited production run was scheduled.

So, Cadillac may have some ELR oversupply, but basically that was always the intention.

Or, in other words, sure it is not selling all that well (as expected with that high starting MSRP), but there’s no failure story here. Let’s move along.

Categories: Cadillac

Tags: , , ,

Leave a Reply

54 Comments on "Here’s Why The Cadillac ELR Is Not A Failure"

newest oldest most voted
Brian

Not convinced. GM wanted to capitalize on the early adopters who are willing to pay a premium, but they were too late to the scene. Those people are already driving Volts.

Assaf

Or – more likely given the price – Tesla Model S’s.

Brian

True story

Tim

That’s one theory, but it belies the overall financial impact on the dealers and the market realities we’re seeing in the latest financial incentives.

First, dealers are buying these cars from GM and the cars are sitting on lots doing nothing but drag down the dealers’ financial results. The premise in this article is that dealers are fine to absorb the working capital required to facilitate GM’s production planning efficiencies.

Second, if this was always the plan to sell a low number of units each month then what’s up with the huge incentives we’re seeing right now? Those incentives are more likely the result of needing to move those units…because having those cars sit on dealer lots is a pretty significant drain on the dealers’ finances.

Assaf

+2

Dr. Kenneth Noisewater

Don’t forget the service aspect as well. Could Cadillac-only dealers be expected to fork out for the specialized tools, equipment and skills needed to work on Voltec for such a meager number of vehicles? Or would ELR owners be expected to deal with Chevy service?

See Through

Good points. But there are a lot more Volts than Model s. and Volts required the least amount of maintenance in JD Power & Associates 3-year dependability study. So, it isn’t as meager as you indicate.

Dr. Kenneth Noisewater

Would folks expect to bring Volts to Cadillac service?

If not, then Cadillac service would only service ELRs, and their overall number was never intended to be any larger than ‘meager’.

So, presumably ELR owners needing maintenance (and while Voltec has been reliable, it is also complicated, things do go wrong, and it does need periodic maintenance including fairly precise flushing and filling of its complex coolant loops) would get it at Chevy service centers that can amortize the necessary tooling and skills across both Volts and ELRs.

David Murray

If they had planned to sell 2,000 per year, then they would need to be selling around 150 per month to meet that. So while it may be true that the car was never meant to sell in high volumes, I think they were still expecting to sell 3x the volume they are selling now.

Andrew

If ELRs were selling at a rate that GM had planned for there wouldn’t be $15,000 in incentives, 0.9% financing, and a $3,000 EVSE credit bundled with each ELR seven months into the model’s launch.

Not only is the ELR a clear failure at this point, it may be GM’s biggest blunder in the last ten years.

At the current rate of sales it’ll be easy to find a 2014 ELR collecting dust when the 2016 models are being unloaded off the transport trucks.

liberty

You do realize that gm went bankrupt, and didn’t properely recall the faulty ignition. How is this car their biggest mistake.

Andrew

I mean product success blunder, not killing off your customers with sloppy engineering blunder.

Given that it’s GM I should have been more specific. My apologies.

Assaf

Sorry, not buying the “not failure” line.

In all this discussion no one mentioned the Winter Olympics ad campaign. That alone had cost… how much?

And the return is 50 sales per month?

I really hope the new GM CEO can make better EV decisions. Said it before, will say it again until we see some positive signs.

David Murray

To be fair, that ad wasn’t specifically for the ELR, rather for the Cadillac brand name. Originally it wasn’t even supposed to have the ELR in it.

Rodrigo Henriques Negreiros Magalhaes

Cadillac just hired the guy at Nissan that don’t believe in electric cars and had canceled the Infinity electric saloon. Write this, in few years we will see people at GM knocking in the government’s door again ask for more money to save them. They were still trying to push big/fat/lazy SUV’s when the market was asking for compact saloons and crossovers – Hummer anyone? Now the marketing is moving to full electric vehicles (Tesla, Nissan, Renault, BMW and Volkswagen – to quot the most committed companies) and they are still trying to sell V8, SUV’s, Silverados… The same can apply to CHrysler…

Rodrigo Henriques Negreiros Magalhaes

I hate type fast, many misspellings in the previous comment 😉

IDK

What made GM even think there was a market for the ELR? Well…sales so far is your proof. My guess is the ELR will be “retired” in a year or two.

Spec9

PeeWeeHermanIMeantToDoThat.gif

EV

Nah its a failure lol

GoBlue88

Yeah, it is pretty much a failure.

organicguy

Take the caddy badge off,insert chevy badge. Sell for 40-50 grand. Maybe ,just maybe it has a chance. Fail caddy.

taser54

So many posters conflating “failure” with incorrect pricing.

Lensman

If GM has to slash the price so much that they take a loss on every one they sell (or take a much steeper loss, if this is indeed a very limited production “California compliance” vehicle), then that’s what most people call a “failure”.

Dr. Kenneth Noisewater

I doubt it’s a ‘compliance’ vehicle. At best, it’s a ‘green-sticker’ vehicle, but AFAIK it’s being offered nationwide.

A battery-only variant? _THAT_ would have been a compliance vehicle, and with >=60kWh of battery and 300kW RWD motor could even been worth its asking price.

GoBlue88

The pricing is a huge part of the success or failure of any car. Screwing it up can lead to failure. As such, the point stands.

Taser54

From reports, GM corrected the price. Now what?

GoBlue88

Did they correct it enough? It is still an overpriced Volt.

James

It just doesn’t present any real premium over the Volt, except a slicker (but not groundbreaking) body and the Caddy emblem. Had they included a big battery, then it would have justified the price, but I would expect at least 100-mile range for a $30-40k premium over the Volt, plus quick-charging.

The Volt will be my last gas-burning car, and my last GM unless they offer something extremely compelling, which I just don’t see coming.

Dr. Kenneth Noisewater

It has a much nicer interior, but all things considered it’s not worth any more than say $10-15k over the Volt.

ffbj

Maybe they should go the obnoxious, in your face commercial route, describing how the ELR is the latest in American know hos and with engineering is that so exceptional. Oh wait, they already tried that.

Dan Gallagher

+1 ELR Exceptional Loss Realization

Rodrigo Henriques Negreiros Magalhaes

This car already born dead. First who wants and electric car doesn’t want to spend money with fuel or continuous burning fuel and generating CO2 emissions. Second, the price would be OK if it was something completely new, but everyone knows that is just a fancy Volt. And then we have the basic amazing Tesla Model S for the similar price. Any doubt which one people would choose? Well, is enough to see the sales figure of the Model S and the ELR. When will the people at GM learn or at least follow trends? The Nissan Leaf isn’t an amazing car, but is selling in great number in the world because was the right car at the right moment – the one in the heart of the American crises that messed with the whole world and when people were more open and aware concern to spend money with fuel and preserve the environment….

Thomas j. Thias

Heh, I can see why you are anonymous-

FAIL-

Thomas J. Thias

517-749-0532

Twitter.com/AmazingChevVolt

Lensman

The article concludes “…sure it is not selling all that well (as expected with that high starting MSRP), but there’s no failure story here.”

How is “not selling as well as expected” not equivalent with failure? The only way this can be considered “not a failure” is if GM deliberately overpriced the car initially, planning to reduce the cost after the very early adopters had bought theirs.

Well, that’s the way Apple prices their iPhones, but so far as I know, automobile manufacturers don’t use that business plan.

epicfail

Total Epic FAILURE!

David

Clearly an absolute failure. Failure for the ELR, black eye for Cadillac and GM. Shows poor judgement.

Anon
Lou

“We’re only going to make so many, and for so long.”

Yeah right! They over-priced it plain and simple.

Phil

Let me get this right…GM is expecting a customer walks up in late 2015 and says “I would like a *NEW* 2014 ELR please. Yes, the one that has been sitting in your lot for the past 15 months.”

Just_Chris

In some ways I think this is failure but then I keep remembering that they have sold nearly 400 volts for twice the price of a regular volt and I start to wonder if GM is really doing so badly with this.

Thomas j. Thias

Just_Chris

Stunning Cadillac ELR Extended Range Electric Luxury Coup –

Q: “Under The Hood, The ELR’s Electric Drive System Is Similar to the Chevy Volt’s In The Same Way A Lotue Elise Engine Is Similar To A Toyota Corolla They Have The Same Source But Different Details.

Cadillacs Version Provides 295 pf Of Instant Torque And Is Powered By A T-Shaped 16.5 kWh Lithium Ion Battery Pack!”

Via- AutoAcademics

Link Goes To Review of Same-

http://www.youtube.com/watch?v=83EDpz0Azd4

Best-

Thomas J. Thias

517-749-0532

Twitter.com/AmazingChevVolt

Just_Chris

The Lotus / Toyota / Porsche-Boxter comparison probably isn’t a bad one 27k / 15k / 38k (British pounds – sorry don’t have the US prices) vs. ELR / Volt / Panamera. 75k / 35k / 100k. So really not all that different… sort of.

I shouldn’t let the fact that I wouldn’t buy a Porsche or an ELR sway my belief that a car has succeeded or not. I think by basing the ELR on a much lower priced model I suspect that GM have saved a lot of money in development costs but (much like what ford did with Jag) not done a whole lot for the cars image.

Electric Car Guest Drive

When dealers start paying flooring, all the ELRs sitting in the lot will move.

Thomas j. Thias

OPINION/

Thanks Eric for this story.

The entire comments section thus far is impeachable due to lack of market understanding.

The direct competitor to the Stunning Cadillac ELR Extended Range Electric Luxury Coupe is the Porsche Panamera S E-Hybrid.

According to the InSide EVs, monthly sale reports feature, the ELR ERELC and the Panamera S E-Hybrid are running almost neck and neck in sales since January 1st, 2014.

Cadillac ELR ERELC 390 YTD
Porsche Panamera 481 YTD

Link Goes To InSide EVs June Sales Board-

http://insideevs.com/wp-content/uploads/2014/07/2014-sales-chart-Jun-vfinal.png

Any comments or apparent attacks on GM or Cadillac in regards to the marketing success of the product that do not also include the Porsche Product are seriously lacking in credibility in my opinion.

Best-

Thomas J. Thias

517-749-0532

Twitter.com/AmazingChevVolt

Pantarei

However arbitrary it has always seemed to me, traditionally the level of success of a vehicle is determined by whether or not it can meet its sales target. Since by my knowledge no expected sales number for the ERL was ever publicly stated, technically you can’t really say it’s a failure. The Volt however, which sells just over a third of the 60.000 it was supposed to, is by that standard a giant failure.

Grumpy

Well the ELR is not a success by any reasonable definition.

I went to the dealer and test drove one. It is nicer than my Volt, but very impractical. The back seats have almost no leg room, so it is basically a 2-seater, and they replaced the hatch-back with a smallish trunk. I can load a 7 foot tall Christmas tree in my Volt, but you won’t get much more than a couple of golf bags in the ELR.

It looks cool, but I would still take a Volt over an ELR for the same price.

Brian Henderson

ELR’s sales fall midway between the Honda Fit EV and Toyota RAV4 EV per month.

If this is the goal, then this Cadillac is a success. Should the goal be to have a mainstream PEV that will be seen on the street, success will continues to be out of reach … at least for now.

Taser54

Funny you should cite the Fit EV, an EV who was also priced incorrectly initially and then sales happened when it lowered the price and added unlimited miles to the lease.

Is the Fit EV a failure? Or did it respond to the market.

Likewise the Nissan leaf, when it initially came out was priced thousands of dollars more. The public didn’t embrace it in the US until a price drop. Is the leaf, “a failure”?

Far too early to declare the ELR anything but initially overpriced for the market.

Carguy

Had GM launched the initial Volt as a Caddy with some styling elements of the ELR they would have had a big hit. It’s a case of not doing your homework – early EV buyers are not all fuel misers looking for economy cars most of the EV buyers were trading in luxury cars – and many of those buyers would have had a smoother transition to Cadillac than to Chevy brand.

DaveMart

‘there’s no failure story here. Let’s move along.’

Or not.

The phrasing indicates that the author feels that he has conclusively and absolutely settled the issue, without possibility of rebuttal.

Lets just say that he hasn’t, as other posts in this thread make clear.

vdiv

I’d like to hear from ELR owners if they see their car as a “failure”. Otherwise GM’s marketing, production, and sales techniques are rather incomprehensible and arguably disappointing.

Brian

What a ridiculous measure of success. While I hope all ELR drivers love their cars they will be biased towards them since the chose to put a large sum of money down to drive one.

offib

Well, that’s new. I don’t know they could do that.

Anyway, I don’t understand why people are being a bit stubborn and still call the ELR a failure. The ELR isn’t supposed to be selling like hotcakes.
As the guy from TFL said, the Volt and the ELR are both like the Citroen DS and SM. One’s the sensible and well liked saloon, the other is an exclusive and stunning.

The ELR is suposed to be a stunning and exclusive car. I don’t see anyone calling the SM a failure (you can get death threats by saying that)!

For a more modern perspective, introducing the wildly odd-ball Renault AVANTIME. That too was exclusive, that too didn’t sell very much or lasted very long, that too looked different and that too was never seen as competitive. The only people who now call it a sales flop is TopGear, they don’t have any interest for it understanably. Those who do are owners and enthusiasts along with those who worked with the car from the beginning. They view it as a privelage to own an AVANTIME or to have worked with the AVANTIME.

Blastphemy

I’m an ELR owner. Wish I had waited until July to lease it, though!

It appears that Cadillac’s marketing strategy for the ELR is (1) Caricature your potential customers in the most demeaning way possible; (2) Ignore customers’ concerns about the ridiculously high price; (3) Insult your target customers by calling them derogatory names and inferring they’re cheap; and then (4) offer a 20-25% discount off the MSRP to attract those same customers who were originally turned off by steps 1-3.

Now I see that Cadillac has hired Johan de Nysschen, the decidedly anti-EV and backward-looking executive who was unable to salvage Infiniti’s domestic sales and who killed both of its promising luxury electric cars in development (the LE and Emerg-E). Cadillac hiring de Nysschen appears to be the death knell for the ELR, which reaffirms my belief that Cadillac has lost its way.

No wonder so many of those “miserly tree-huggers” Uwe Ellinghaus so publicly dismissed are buying $95k Teslas instead of the Cadillac ELR!