Cadillac Dealers Are Wary of Investing in the ELR
The Cadillac (NYSE:GM) ELR has faced an uphill climb since the start. While it trail blazed new ground for its segment — it’s the first luxury extended-range hybrid — there were those who didn’t quite feel that it was a natural fit for the clientele who would be shelling out $75,ooo for a luxury sports coupe.
Added to its weighty price tag, the ELR isn’t exactly a performance machine. It musters a not-so-mighty 207 horsepower, which, although is considerably more than the Volt on which its based, isn’t enough to play in the league that Cadillac has shoehorned the ELR into. Drawbacks aside, the ELR’s hill just got a little bit steeper.
Late last week, Green Car Reports carried a story that said 410 Cadillac dealers have opted to carry the model in their showrooms out of the 940 Cadillac locations around the country. While the ELR is by no means a mass-production model, that’s still quite a low rate that casts some doubts over the future feasibility of the car.
For the dealers, it’s a matter of numbers: They would have to move a certain number of ELRs to justify the cost of retooling their workshops and the expense of just carrying the model through their channels. For a low-volume, high-tech car like the ELR, it’s not worth the expense for many locations.
Cadillac’s ELR is facing two substantial difficulties, and they both have names: Volt and Model S. The Volt is Chevrolet’s compact that costs about half the price of the ELR despite relying on nearly the same underpinnings and definitely the same drivetrain (though tuned down a bit). It’s now Cadillac’s challenge to convince Cadillac buyers that the ELR is more than a Volt with some leather and fewer doors.
Then there’s the Tesla (NASDAQ:TSLA) Model S, which, in its base form, costs about the same as the ELR (perhaps even less) and offers about 100 more horsepower, more torque, and no gasoline needed. Aside from the range and arguably the interior, it’s hard to justify why the ELR has an advantage over the Model S; we’ve decided that the two are aimed at different demographics, but in the end, they’re both remarkably efficient vehicles in their own ways.
It’s likely that big-city dealers will be the ones carrying the ELR, which is a positive for Cadillac, since most of the ELR’s potential buyers are likely in those areas.