General Motors has announced that Mary Barra will be replacing Dan Akerson as CEO as of mid-January. Ms. Barra was previously the head of global product development. As such, she already has to take partial responsibility for the over-hyped and low-selling Chevy Volt along with the upcoming Cadillac version of the car. With Consumer Reports now stating that the new Cadillac ELR (a glorified Chevy Volt) gave them “sticker shock,” will the ELR be the first major embarrassment for Ms. Barra?
Anyone who has followed the Chevy Volt story could have guessed at what the prospects for a gussied up and rebadged Cadillac version of the car, for over twice the price, would be. The vehicle may well be GM’s worst idea in history. I can not imagine what the motivation for GM to manufacture such a car might be. The decision to produce the car should scare the bejeezus out of GM shareholders. Now Consumer Reports weighs in on the newest green car debacle from GM with the following:
In theory, a head-turning Cadillac with all the trimmings should be worth more than a well-outfitted compact sedan, and thus help its maker cover the cost of the battery technology. That’s all well and good, but Cadillac set the base price of the ELR at $75,000, before adding in $900 for delivery, and deducting $7,500 for a federal tax credit. That’s $40,000 more than a Volt! And for that kind of scratch, you could buy a car in a whole different league, like an Audi A7 TDI or Tesla Model S. That leaves us wondering, who will buy this car?
…We couldn’t escape the feeling driving it around that for this kind of money, we’d a lot rather be piloting a Tesla, which is a lot quicker, sportier, and roomier, and gives you a whole lot more electric range. One staff member dismissed the ELR as a $75,000 version of the Chevrolet Cruze (on which the Volt and the ELR are, indeed, based). Ouch!
“Ouch” indeed! It will be interesting to see how Ms. Barra will defend the production of “a $75,000 version of the Chevrolet Cruze.” If overpriced, politically popular EVs that will not sell is the direction Ms. Barra wants to take with GM, they are in trouble.
Another question Consumer Reports asked regarding the ELR was, who will buy it? Here are a few of ideas on who the potential ELR purchasers will be:
1: Cronies at corporations that want to appear green, but want their executives to drive in something a bit more stylish than the Volt.
2: Congressional Democrats.
3: Executives at GM.
4: President Obama in two years.
5: The group of very wealthy individuals who inherited their wealth and are intellectually-challenged enough to believe that they are somehow helping the environment while saving money by spending $75,000 on a car that will use one gallon of gas per day less than a conventionally powered vehicle.
All told, that list should result in a few hundred, taxpayer-subsidized sales of the Cadillac ELR per month. We will then have to wait and see if Ms. Barra takes the same course as her predecessor by blaming the low sales on a lack of supply. Considering the political importance of electric vehicles and the fact that GM’s Board of Directors still includes Obama appointees, it’s a possibility.
Mark Modica is an NLPC Associate Fellow.