Autos

Cadillac’s Struggling ELR Wins Some Financial Support From Up Top

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Despite being launched over five months ago now, sales of Cadillac’s ELR plug-in hybrid have been moving along at a snails’ pace. So slow, in fact, that GM is now incentivizing dealers with $5,000 just to get potential buyers to park it in the front seat, even if temporarily.

It’s known internally as the Demonstrator Allowance Program, and it is designed as a tactical move to help register more test drives, Cadillac spokesperson David Caldwell told Automotive News. He also said it probably will take awhile for widespread consumer awareness about the ELR. “We want to do it because of the newness of the ELR,” Caldwell said. “It’s a different brand.”

Some might say that the ELR looks like a million bucks, but in reality, its MSRP of $75,000 has been hard to swallow for consumers. Despite its luxurious interior and added horsepower, many can’t get by the fact that General Motors is asking twice the price of a Chevy Volt despite the ELR being what is essentially a really nice Chevy Volt. With two fewer doors. Last week, The Wall Street Journal reported that Cadillac was offering $3,000 towards purchase or lease of the vehicle.

GM had 1,700 ELR coupe models in stock at the end of April. According to the Automotive News Data Center, that’s a 725-day supply of vehicles — a colossally high number, exacerbated by the fact that only about half of Cadillac’s dealer network is carrying the car.

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Essentially, here’s how the program works. Dealers will have until June 2 – that is, about three weeks from now – to designate certain ELRs as test vehicles, for allowing patrons to drive. The program will pay $5,000 for each ELR assigned to the test fleet, and dealers with under seven unused ELR models in inventory may designate one for the demonstrator program, and those with more than seven ELRs in their inventory can designate two as test vehicles to qualify for $10,000 in payouts, Automotive News said. Each vehicle must accumulate a minimum of 750 logged test drive miles, it added.

In efforts to boost sales efforts, dealers are eligible to receive an additional $2,000 for every ELR sold in July, and an extra $1,000 for every one sold in August.

However, the problems with the ELR might run deeper than sales incentives. What it boils down to is Cadillac is asking consumers to pay over $76,000 (after destination) for a vehicle that, for all intents and purposes, is built on the same underpinnings of a car that runs for about $35,000. The reason Tesla can get away with being both eco-friendly and expensive is because it can run with the pack that it’s priced in — the ELR simply can’t compete on a performance basis with the other cars in its MSRP bracket.

What’s also notable is that outside of the ELR, Cadillac seems to be getting everything else so right. The CTS and ATS sedans have been met with near unanimous praise, and the new Escalade is shaping up to be one of the best vehicles to fly under that nameplate yet.

It’s likely that GM sunk a fair amount of investment into the plug-in platform, and it’s understandable that the company wants to get a better rate of return. However, the ELR would perhaps be best suited with Cadillac’s potent turbocharged V6 under the hood, powering the rear wheels — or committed fully to an electric powertrain to take the Tesla head on, at least in some aspects.