Drastic price cuts place Cadillac ELR where it should have been all along

General Motors is serious about electric vehicles, and it makes good ones. The Cadillac ELR is an example of GM’s finest plug-in hybrid powertrain wrapped in an enticing interior and striking exterior. Yet dealers have struggled to move the ELR, causing some to resort to drastic measures.

The ELR starts at $75,995 before incentives, significantly higher than the $34,170 Volt. Even after a $7,500 federal tax credit, the ELR remains “priced out of its league,” in the words of Consumer Reports.

The ELR has sold just 390 units through the first 6 months of the year. GM expected volume to be limited for its self-described “niche” offering, but they probably did not expect demand to be this low.

Desperate times call for desperate measures

In a move to inspire sales, GM had previously offered its dealers a $5,000 incentive to designate the plug-in coupe as a test drive vehicle and a $3,000 incentive to potential ELR buyers. Now dealers are taking matters into their own hands.

Inside EVs and Transport Evolved report that a few dealers in Florida, Texas, and Maryland are dangling from $12,000 to $13,600 in discounts to move the ELR. Coupled with federal incentives, this reduces the previously unreasonably-priced ELR to a virtual bargain in the mid-$50,000 range.

It is a shame the car wasn’t initially closer to this bracket, as it would have had a great deal more success in both sales and image even if GM would have lost money on each unit sold.

A good car spoiled

Make no mistake, GM engineers toiled over the Cadillac ELR. The stylish plug-in hybrid coupe is more than just a glorified Chevrolet Volt – it uses the same platform and Voltec powertrain but is cleverly calibrated to be a performance luxury vehicle worthy of its badge.

Granted, a yawning 0-60 time of 8 seconds leaves a lot to be desired for a Cadillac with its price tag, and it manages just 33 MPG in gasoline range-extender mode. But the ELR is heavier than the Volt due to its long list of luxurious features, so it boasts increased horsepower and torque with identical hardware thanks to dramatically upgraded software. It uses an innovative suspension featuring continuous damping control and nifty paddle shifters to control regen intensity.

Nobody denies that the ELR is a nice car. It turns heads with striking looks, and accomplishes everything the Volt does except with a flair for Cadillac style and luxury. However, it is that price tag that makes everyone forget what kind of vehicle it is. Before its launch, ELR Product Manager Darin Gesse acknowledged to Charged EVs that some would be put off by the sticker shock.

“Could we have set the price lower, and then optioned it up?” asked Gesse. “Yes, but we didn’t feel that was the right thing to do for a luxury offering. There are very few features available beyond the base ELR. It’s an all-in luxury car out of the chute.”

Maybe so, but this could have been a fatal decision for the Cadillac ELR. GM remains committed to its plug-in tech, but it did not help itself by pricing the ELR as high as it did. Units will begin moving more quickly with the recent dramatic price slashing, but maybe this should have been done from the start. GM would probably have lost money on the vehicle, but it could have avoided the ridicule that came with the choice to charge a $40,000 premium over the Chevrolet Volt.