[RCB268]

The Autoextremist weighs-in on the ELR's pricing...

http://www.autoextremist.com/ [BTW, this link is good for this article for one week after this post; afterwards, you'll have to 'search' for the title since the site renumbers the link.]

Personally, I am dubious about the 'intended' pricing of this car. Even for a high-tech Cadillac, I think it's too expensive for what you're getting, but that's just me...

--RCB

 

[larry4pyro]

I watch Peter a lot on Autoline. He's a gear head, and loves performance cars, and not a fan of EVs. But he's a realist and I think he makes his case well that Cadillac is building great cars in the luxury segment and pricing them competitively. I think the following excerpt from his article points out Cadillac's conodrum well:

"Then there’s the price point for the ELR, which is a damned-if-you-do, damned-if-you-don’t proposition for Cadillac. If the ELR were to be priced too low, it wouldn’t be perceived as being special enough, or worthy of an image-elevated Cadillac. But if the ELR is priced too high, then the naysayers in consumer-ville will either deem it as not being ready for prime time, a glorified Volt, or even worse, ignore it altogether. (I happen to think the ELR should have been priced right at $60,000, but Cadillac marketers have put their sword in the ground, and they will most assuredly fall on it if they can’t draw consumers in.)".

I'm with Peter, I think the folks at Cadillac know what they are doing. Just look at the cars they are producing. I say let's hold off in judgement of the ELR until after it is released.

 

[MTN Ranger]

I think that is a good summary of the state of Cadillac and an honest assessment of the ELR.

 

[RCB268]

Interestingly, since this subject is on 'pricing' of high-end EV's, on the next page of the this week's issue of Autoextremist, is this:

ON THE TABLE - OCTOBER 16, 2013

[Up Arrow] BMW. Editor-in-Chief's Note: Hear that whooshing sound? That's the window of opportunity closing rapidly for Tesla. Early acceptance - and orders - of the BMW i3 electric car in Europe is beyond expectations, to the point where the German manufacturer will have to increase production. Is it a precursor of things to come in this market? Yes. Tesla has enjoyed its day in the sun, but Elon & Co. is about to learn a very important lesson about the power of brands. - PMD

Take-away: if you have a pile of cash to spend on expensive EV's you will have some cars to choose from! Cadillac Division might as well be 'in-on-the-action!'

 

[stuart22]

I could have written what he said, if I was better at putting my thoughts into words. Since the price announcement, I've felt like a lonely vote amongst a landslide of condemnation of GM and Cadillac.

The truth is, the ELR has a different target than Tesla with its Model S. Their message is (and hopefully WILL BE) a different kind of luxury, where its sensual kinds of smoothness and responsiveness are limitless, always available at one's command.

I think it's time GM takes the gloves off and start touting the extended range aspect. It's as if they either don't know how to do it, or are intimidated by the instant and vocal criticism sure to come from EV purists who would accuse GM of wanting to squash the EV movement. Meanwhile, Nissan gets praised for its commercial (which I find to be excellent) where they pose the question, 'Why gas?'.

Cadillac's answer to that question is simple - true luxury is the absence of limits - cars with limits end up limiting your life is the unspoken takeaway.

 

[Blastphemy]

Here's the most important line from that article: "I happen to think the ELR should have been priced right at $60,000, but Cadillac marketers have put their sword in the ground, and they will most assuredly fall on it if they can’t draw consumers in."

 

[DonC]

I agree with just about everything in the article, including that the ELR should have been priced at $60,000. At the end of the day the ELR is a small car without a performance story. Seems like $60K would be a healthy premium you'd expect to pay for a premium ride. The ATS starts at $33K and the CTS at $39K. Just seems like the pricing is out of line.

 

[voltone]

The pricing is in line if you consider that it is an ?LR vehicle, not an ?TS vehicle. The last ?LR vehicle, the XLR, was priced at about 75k as well.

I think one thing missing from many people's premature evaluations of the ELR is that the price may very well reflect the effort Cadillac put into the vehicle. A lot of vehicle development may have gone into things like the chassis, tuning the active dampening suspension, increasing the comfort and NVH properties of the car. Cadillac themselves are treating it like a halo car and they may just pull out all the stops in terms of making it a truly special automobile.

I think sometimes people lose sight of the fact that in many cases the price of a vehicle is reflected in the vehicle's quality. Many people here have given heaps of praise to the Volt because it separates itself from the Prius by having much better driving dynamics and a much more premium feel. GM could have probably developed the Volt to compete with the Prius directly on price by sacrificing some of these things, but at least according to this forum, people were glad to pay a bit more to get the better product.

Don't knock it till you've tried it, and don't write it off just yet.

 

[Koz]

Some people will surely buy the ELR but how many? Take the plug (not the EV ride) out of the equation and think of why people buy the cars they choose. Think of the cars in the orice range and buyers of $65-$100k cars. Where are the ELR consumers going to come from? GM's plan is to make about 2k/per. That doesn't sound like they want or expect much from it as far as sales. Nobody, including GM, have been able to articulate well what the target market is or could be. We've seen many, many comments on this board over the years pining for a Cadillac Volt and the ELR once the concept was shown. Many said that would likely be their next car but I have yet to see one comment that it will be now that the price has been revealed. If they can't draw buyers from this "per-sold" crowd, then I struggle to see where they will come from. Keep in mind, a lot of people moved down in price and brand prestige to buy their Volts. Many even coming from Cadillacs. Perhaps the GM/Cadillac minds were thinking something good but nobody seems to be able to put their finger on it, including GM. Perhaps is a boundary experiment for GM, a vehicle to push new technologies and concepts in the real before they try to sell them in earnest?

 

[stuart22]

Perhaps Cadillac realizes there exists among the premium market people who would cross over to the silky smooth responsiveness of electric power, but who are not comfortable with and therefore resistant to the fact that in a BEV, any longish trip is an adventure with the potential of unforseen problems cropping up. The ELR is free of this limitation. Its definition of luxury thus is different than Tesla, a difference which Cadillac should be able to exploit.

 

[voltone]

Nobody, including GM, have been able to articulate well what the target market is or could be.

I don't really understand how you and other people can pretend there is absolutely no market for this car when just a week ago before the price was released it was one of the most anticipated new Cadillac models. The Converj concept was one of the most well received concepts from Cadillac in recent history with many people clamoring for them to build it. The model has captured many people's imaginations.

Just imagine a plug in hybrid electric car which has Cadillac's full craftsmanship and attention to detail behind it in one of their most stunning designs with a money-is-no-object interior. You could put any price on it and there would be buyers. The difference between 60k and 75k in the luxury car world is really relatively small, and you can bet they will have no trouble moving a couple thousand a year. The only knock against the car is really it doesn't have the same straight line performance as other cars in the price range, but the ELR isn't targeting performance, it's targeting smooth and end high luxury. Who is the target buyer of the 120k CL-Class coupe? Or the 99k Porsche Panamera E-Hybrid Sedan? Or even the older 76k XLR and 104k XLR-V? A person who loves the brand, loves the car, loves the unique combination of features it offers, and doesn't mind paying more to get a premium and exclusive product. I'm betting there are enough people out there to justify Cadillac building the ELR.

It's a small group of people, sure, and it's most likely a demographic you can't just pigeonhole and say "here, this is your exact target market, age X, occupation Y, wants Z", etc. etc.

I'd also like to point out that internet forums in general are notoriously bad for not putting their money where their mouth is especially regarding new car models. I'm sure the hugely negative reaction in this forum isn't bothering GM at all. Internet forums were clamoring for a CTS Wagon and you'd think with all the fervor for one it would have sold millions of copies. Turns out it accounted for less then 4% of CTS sales. The reaction to the ELR is another perfect example. Many people saying they would just buy a Tesla Model S. Well, the Tesla Model S has been out for a while, so you can go ahead and buy one now. I wonder how many people really will?

 

[Dyohn]

I suspect a lot of the nay-saying is coming from people who simply cannot afford the ELR and are upset about that and are perhaps upset that there are people who can. Sort of like the people who say any other premium luxury item is "too expensive, so no one will buy it." Surprisingly, those goods are still available and plenty of people do buy them.

 

[stuart22]

I suspect a lot of the nay-saying is coming from people who simply cannot afford the ELR and are upset about that and are perhaps upset that there are people who can. Sort of like the people who say any other premium luxury item is "too expensive, so no one will buy it." Surprisingly, those goods are still available and plenty of people do buy them.

I think very few naysayers have a sense of worth that goes beyond the nameplate tacked onto a car.

 

[focher]

I suspect a lot of the nay-saying is coming from people who simply cannot afford the ELR and are upset about that and are perhaps upset that there are people who can. Sort of like the people who say any other premium luxury item is "too expensive, so no one will buy it." Surprisingly, those goods are still available and plenty of people do buy them.

it seems GM actually admitted its own problem with the ELR with such a low volume target. It's hard to imagine even why bothering with all the engineering with such a ridiculously low target. $75k x 2000 = 150 million. And that's not even gonna happen.

 

[voltone]

it seems GM actually admitted its own problem with the ELR with such a low volume target. It's hard to imagine even why bothering with all the engineering with such a ridiculously low target. $75k x 2000 = 150 million. And that's not even gonna happen.

Many times concept cars enter production based on potential owner interest after they are shown at car shows. If you think the ELR is outrageous check out the BMW i8, the Porsche 918 Spyder, the Lamborghini Sesto Elemental.

The Converj concept was incredibly popular at car shows, and that interest probably fueled it's production destiny. And Cadillac will sell 2000 without blinking an eye. Even the XLR sold 15000+ examples, while being more expensive and being arguably the least "Cadillac" Cadillac they sold being a two seater high performance sports car.

 

[Dyohn]

$75k x 2000 = 150 million. And that's not even gonna happen.

Wanna bet?

 

[Voltastic]

it seems GM actually admitted its own problem with the ELR with such a low volume target. It's hard to imagine even why bothering with all the engineering with such a ridiculously low target. $75k x 2000 = 150 million. And that's not even gonna happen.

They built the business model for the car on this MSRP and said that it would be a limited production unit. I think they said it would be a 3 year run so @ 3000/year * $75k = $675M total revenue. Some Google'n shows that GM invested $35M in the Hamtramck plant for ELR production. Call the development costs an even $100M* over and above Volt and that is $135M in costs. GM doesn't seem to market anything but let's throw another $5M* just for giggles and the total to market on this is $140M. Margin on this is probably quite high so the BOM on it is, oh, $50k* * 9,000/units = $450M. That leaves us with $675M - $135M - $450M = $90M profit less various other misc.

But the ELR's raison d'etre is not high volume / high profit so I think it will do just fine.

* = numbers pulled from you-know-where

 

[jashev]

I suspect a lot of the nay-saying is coming from people who simply cannot afford the ELR and are upset about that and are perhaps upset that there are people who can. Sort of like the people who say any other premium luxury item is "too expensive, so no one will buy it." Surprisingly, those goods are still available and plenty of people do buy them.

While that may be true to an extent, don't think that just because you can afford to pay that much for a car you will be stupid enough to do that. I actually gave my Caddy dealer a deposit to hold the first ELR (I've bought a few cars from them over the years), expecting the car to be priced in the $60k range, which the dealer also expected. I called and canceled that order today based on the ridiculous price point. Could I afford the car? Yes, but that doesn't mean I will overpay for a car that's simply not worth it.

Yes I looked at and test drove the Tesla and had decided that it wasn't worth the $20k more than I expected to spend on the ELR. This price point will get me back to the Tesla store next week. I love my Volt and traded a two year old BMW 750 in when I bought it.

The pricing makes no sense to me (nor did it to the Caddy dealer who doubted he would be selling many of them). I'm sure that someone will buy the car, but GM had a window of opportunity here to be the world leader in this technology and in a few years their EV market share will be just an asterisk at the bottom of the page.

 

[voltone]

GM had a window of opportunity here to be the world leader in this technology and in a few years their EV market share will be just an asterisk at the bottom of the page.

Let's be honest - Tesla has a bigger chance of being an asterisk then GM. Tesla's most recent quarter saw them post a -8% profit margin, the first full quarter the Model S was available. For 2012 that profit margin was -95%.

GM had a hand in developing many of the technologies that even made the Tesla Model S possible and let's not forget that GM pioneered the whole EV thing with the EV1. There is nothing Tesla is doing now that GM can't do now or won't do in the future, as they are proving with the Spark EV, the ELR, and the Volt.

Enjoy your Tesla, but ripping on GM for their lack of EV development is so 2006.

 

[jashev]

Let's be honest - Tesla has a bigger chance of being an asterisk then GM. Tesla's most recent quarter saw them post a -8% profit margin, the first full quarter the Model S was available. For 2012 that profit margin was -95%.

GM had a hand in developing many of the technologies that even made the Tesla Model S possible and let's not forget that GM pioneered the whole EV thing with the EV1. There is nothing Tesla is doing now that GM can't do now or won't do in the future, as they are proving with the Spark EV, the ELR, and the Volt.

Enjoy your Tesla, but ripping on GM for their lack of EV development is so 2006.

Don't misunderstand me. I think Tesla is a long shot also, but I believe that GM will not compete well in this price range against the rest of the luxury marquees such as BMW, Mercedes and Lexus who will be selling their EV offerings in this price range to their existing customers. GM has never done well in that market because they still don't get the level of customer service required to attract and keep those customers. In a $60k market they wouldn't be able to build them fast enough. Most of my BMW/Mercedes friends still are shocked that I gave up my BMW for a GM product. GM will not be successful at the $75k level.