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Cadillac will build a Tesla fighter, sources say, as GM's leading EV brand

WASHINGTON — Cadillac is expected to become General Motors' lead electric vehicle brand as the largest U.S. automaker gears up to introduce a new model under that luxury marquee to challenge Tesla, two people briefed on the matter said Thursday. GM is set to announce Friday as part of an investor update that a Cadillac will be the first vehicle based on its forthcoming "BEV3" platform, the people said. The vehicle platform is the basis for vehicle underpinnings, including the battery system and other structural and mechanical parts. GM is not expected to disclose on Friday additional details, including precisely when the Cadillac EV will be built, whether it will be a crossover or sedan, or where it will be assembled, the sources said. A GM spokesman declined to comment. GM had previously focused on making electric vehicles under its mass market Chevrolet brand, including its plug-in Chevrolet Volt and battery electric Bolt. GM announced last year it was ending production of the plug-in Volt as well as a low-selling plug-in Cadillac CT6, even as it moved to boost EV spending. GM said in November as part of its restructuring efforts it was doubling resources for electric and autonomous vehicle programs over the next two years. Last month, two Ohio senators asked GM to commit to building all future electric vehicles for U.S. buyers within the country. GM said in 2017 it planned by 2021 to introduce a new dedicated flexible electric vehicle architecture and an advanced battery system to support the development of at least 20 new models in the United States and China. GM said in 2017 that a new electric vehicle platform in 2021 will serve as a base for at least nine derivatives, ranging from a compact crossover to a large seven-passenger luxury sports utility vehicle and a large commercial van. Johan de Nysschen, who was then Cadillac's president, told Reuters at the Detroit Auto Show in January 2018 the luxury brand will play a "central role" in GM's electrification strategy, including China. He added that Cadillac would be "at the forefront" of rolling out new electric vehicles in the United States and China. He left GM in April. This week, GM said Cadillac sales in China rose 17.2 percent in 2018, surpassing 200,000 units for the first time. GM Chief Executive Mary Barra has said that GM aims to sell 1 million electric vehicles a year by 2026, many of them in China, which has set strict production quotas on such vehicles.

GM CEO Akerson calls out Tesla, says Cadillac will compete on EVs

Cadillac will be taking on Tesla Motors, the underdog EV manufacturer that's seen heaps of critical acclaim and stock market buzz with its most recent sedan, the Model S. "If you want to compete head-to-head with Tesla, and we ultimately will, you want to do it with a Cadillac," Dan Akerson, the chairman and CEO of General Motors, told media in Washington, according to The Detroit News.
Akerson continued, telling The News, "We'll sell more Volts and lose less money on the Volts than they'll lose on the Model S." He also took time to point out that Tesla getting vehicles out to customers isn't a guarantee of success or permanence, using Fisker as an example, saying "Does anybody even remember Fisker? I mean, there were a number of them; they are all gone."
This strong talk from Akerson comes after Doug Parks, another GM exec, let slip that the Detroit-based manufacturer has an EV in the works that will cover 200 miles per charge and only cost about $30,000, a massive upgrade over similarly priced EVs that struggle to top 100 miles per charge. Until that vehicle arrives, though, GM is preparing the Cadillac ELR, a small coupe that, like the Volt with which it shares technology, uses a gas engine as a mobile generator to recharge the batteries. Akerson took aim at Tesla again, saying, "But I do think when the ELR comes out late this year, early next - it's certainly the same postal code as Tesla, but now we're going to move up. It's not going to be a mass-produced car."

Will attaching the electrodes re-animate Cadillac?

This announcement last week from General Motors —"Cadillac will be GM's lead electric vehicle brand"— followed quickly by the surprise reveal Sunday night of a Cadillac EV crossover, leads one to wonder whether this is a case of GM pulling out the defibrillator and hoping a full-on jolt of electricity will revive Cadillac from its ongoing diminution in the market. In 2018, Cadillac U.S. sales were 154,702 vehicles, which was down from the 156,440 it had sold in 2017. And the 2017 sales were down significantly from the 170,006 vehicles delivered by Cadillac in 2016. And that is down from the 175,267 sales of 2015. Sure, part of Cadillac's problem — one shared by some other OEMs — is that its sedans aren't selling. But if we put those to the side, realize that in 2018 sales of the venerable Escalade were down by 2.2 percent. Admittedly, that rig is a little old in the grille, and it's suddenly gotten strong competition from the Lincoln Navigator, so a sales decline isn't too surprising. But the XT5, the compact lux vehicle that was launched in 2016 as a model-year 2017 product, had an 11.3 percent decline in a segment that is doing nothing but growing. This is not promising. Although the argument at GM HQ might be that Cadillac can reinvent itself as a Tesla fighter, one of the things that isn't often noted about Tesla vis-a-vis other OEMs is that while sedan sales are generally down, Tesla, which had an estimated 2018 sales volume of 197,680 (according to Cleantechnica.com), made its numbers primarily with the Model 3 and Model S, both sedans, as it has just the Model X crossover. So it isn't just about vehicle architecture. It is going to take more than an electric SUV to change Cadillac's performance. But here's where circumstances can fall in Cadillac's favor. Scale can be highly beneficial to Cadillac versus Tesla. The Chinese market, even though it is weakening of late, will be largely predicated on "New Energy Vehicles," which means electrified and fully electric. And while Tesla only just now broke ground on a factory in China, LMC Automotive reports that as of December 2018, SAIC GM is already well-established there and is the third-largest vehicle manufacturer in China (behind SAIC Volkswagen and FAW Volkswagen). Cadillac is going to be able to take advantage of GM's global efforts in developing EVs, so soon the Cadillac showroom could be filled with an array of luxury EVs that may make even Tesla loyalists take another look.