GM Finally Puts Cadillac ELR Out Of Its Misery

Here’s one that wasn’t hard to see coming. General Motors has announced that it is ending production of the Cadillac ELR, which was essentially a gussied up Chevy Volt at twice the price. You can call this one a mercy killing as the overpriced, pseudo-green, government-subsidized vehicle was doomed for failure as low sales figures reflected the lack of value offered by the vehicle. That failure was predicted here back in December of 2013 when the ELR was rolled out.

As with the sales-challenged Chevy Volt, most of the media bought into the Cadillac ELR hype, calling it a potential “Tesla Killer.” Priced at about $76,000, the ELR ran a 0 to 60 time in an embarrassing 10 second range. Despite that, GM CEO Mary Barra had high hopes for the car. That is a fact that should make GM shareholders nervous.

Here’s what I said over two years ago in a piece titled Cadillac ELR: Mary Barra’s First Embarrassment?

…Ms. Barra was previously the head of global product development. As such, she already has to take partial responsibility for the over-hyped and low-selling Chevy Volt along with the upcoming Cadillac version of the car. With Consumer Reports now stating that the new Cadillac ELR (a glorified Chevy Volt) gave them "sticker shock," will the ELR be the first major embarrassment for Ms. Barra?

…Anyone who has followed the Chevy Volt story could have guessed at what the prospects for a gussied up and rebadged Cadillac version of the car, for over twice the price, would be. The vehicle may well be GM's worst idea in history. I cannot imagine what the motivation for GM to manufacture such a car might be. The decision to produce the car should scare the bejeezus out of GM shareholders.

It is obviously a reflection of GM management’s lack of vision if they believed that a car like the Cadillac ELR really had a chance. GM threw good money after bad by spending big bucks on TV ads for a car whose value could be measured more by the political goals met than by the profit potential for shareholders. Taxpayers lost out as well as affluent buyers of the $76,000 vehicle were rewarded with a federal tax credit of $7,500 each.

The failed Cadillac ELR experiment should renew the calls to question our government’s attempt to choose winners and losers instead of allowing the free markets to work. The political influences at GM, along with poor management vision, forced a car onto the public – a car that wasn’t wanted. GM shareholders and taxpayers had to foot the bill for the failure. While GM shareholders should think about what the obviously poor decision to manufacture the ELR tells them about management, Congress and Republican presidential candidates should consider another mercy killing; that would be to end tax credits that go to the wealthiest Americans who buy high-priced electric vehicles which do nothing to help everyday Americans.

Mark Modica is an NLPC Associate Fellow.