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GM has gone upmarket with the 2014 Cadillac ELR. (REBECCA COOK/REUTERS)
GM has gone upmarket with the 2014 Cadillac ELR. (REBECCA COOK/REUTERS)

The Green Highway

EV price points: should auto makers charge up or down? Add to ...

Electric cars were few and far between at this year’s Detroit auto show, but that does not mean that they’ve reached the end of the road. “The electric car is not dead,” said Mark Reuss, president of General Motors North America. “Zero emissions are here to stay,” said Carlos Ghosn, CEO of Nissan/Renault.

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GM and Nissan have made the biggest commitment to electric cars and it was interesting to note the different tracks they’re now following. GM unveiled an electric Caddy in Detroit, the magnificent-looking Cadillac ELR, which will likely be priced north of $60,000 when it comes out next year. Nissan, on the other hand, slashed 18 per cent off the price of the Leaf to bring it in under $19,000 (U.S.) for those qualify for free government money. So who’s right?

Maybe they both are.

Let’s look at GM first. It has been flogging its Chevy Volt with limited success. The Volt gives you about 50 km of battery electric driving before the little gas engine kicks in to keep charging the battery. It is a comfortable, refined car, but boring in appearance. All the company managed to sell in 2012 was a little more than 23,000 Volts – about half as many as it wanted to – and that’s with deep discounts.

The Volt sticker price is $42,000 in Canada, but deals are available. Meanwhile, the all-electric car that has everyone excited is the Tesla S from the Silicon Valley start-up company. Tesla keeps quiet about sales figures, but a couple of thousand sales of the S is probably the total so far. The Tesla is a slick, high-performance, luxury sedan – just what a Silicon Valley millionaire wants in the driveway and is willing to pay up to $90,000 to acquire.

GM is probably thinking it aimed too low with the Volt by trying to make it a people’s car rather than a rich person’s toy. Therefore the electric Caddy.

The Cadillac ELR uses Volt technology, and is to be built alongside the Volt, but it is packaged in the best-looking Caddy maybe ever. It’s sexy and sophisticated and runs off a T-shaped lithium-ion battery pack that runs down the centre of the car. When the battery runs low, after about 50 km, the little 1.4-litre four-cylinder engine fires up and produces more juice. Hammer the throttle and you’ll send 207 horsepower and 295 lb-ft of electric torque (the same as a gas-powered BMW M3) to the 20-inch front wheels.

Cadillacs have been getting better and better-looking recently and this one is right off the charts. Maybe that’s the key; put your battery electric technology in the sexy high-end stuff and sell it to rich people first. Get a few on the road, work on the recharging infrastructure and then build your car for the masses.

Over to Nissan now, where CEO Carlos Ghosn is the foremost champion of all-electric driving in the industry today. He still believes electric cars will comprise 10 per cent of Nissan’s sales by 2020 and has built a factory in Tennessee specifically for electric cars. “We have everything ready. The cars are ready. The technology is ready,” he said.

However, the market is not ready. Leaf sales have never hit their target since going on sale at the end of 2010. Worldwide sales rose 22 per cent to 27,000 last year, including less than 10,000 in North America. But Ghosn isn’t giving up – instead he’s slashing prices.

The MSRP on the 2013 Nissan Leaf will drop by $6,000 (18 per cent) down to $28,800 in the United States. The idea is to take advantage of government incentives so the cost to the consumer in some states is about $19,000. Whether Nissan can make money at this price is another story. Ghosn won’t comment on that, but did say 2013 Leaf sales in North America would be “at least 20 per cent higher” than 2012.

So GM goes upmarket while Nissan heads down. In the long run, I believe Ghosn is right. I can see 10 per cent of new cars being electric some day – as soon as the charging infrastructure is built and governments force them down our throats by creating emission-free urban zones. In the meantime, it’s a marketing dilemma.

 
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