February 8th, 2019 by

A black 2019 Cadillac CTS hybrid from a Cadillac dealership on a city street

In a recent press release, General Motors reported its plans to ditch the hybrid model and instead, go straight into production on an all-electric vehicle to eventually be introduced at a Cadillac dealership near you. That’s right! Cadillac is going to be General Motors leading Electric Vehicle brand; although details are currently limited, one new Cadillac EV model is set for release by an estimated 2021 date with a strong inference suggesting that this one will serve as a building block for a series of luxury EVs from the Cadillac brand. Just imagine a whole fleet of all-electric, luxury Cadillac Escalades with an affordable MSRP that doesn’t immediately make you scoff and look away.

After testing the hybrid market with the short-lived ELR and the now discontinued CT6 Plug-in, GM has seemingly reversed on their original position of promoting hybrids. Up until 2018, GM had sourced much of its’ hybrid or electric vehicles through their Chevy brand; however, upon closer examination, GM has realized the futility of investing in hybrid technology when they view the industry as moving forward to an all-electric modeled landscape. When it debuts in 2021, Cadillac’s luxury, fully electric vehicle will be the first model to utilize GM’s new battery-electric vehicle architecture that will eventually be used for other GM models. The vehicle’s architecture or platform, informally titled the BEV3 platform for now, essentially will be the basis for vehicle underpinnings which include structural and mechanical operating parts as well as the battery systems. The new BEV3 architecture differs from the current Chevrolet Bolt EV’s underpinnings in its overall flexibility; the architecture will be able to accommodate all different sorts of battery-pack sizes, fit a range of varying body types, and fully capable of offering rear, front, or all-wheel drivetrain setups.

“Our mission has been and shall remain very clear,” Reuss told investors. “GM will be the first maker of profitable, highly-desirable, range-leading and obtainable electric transportation. BEV3 will be the canvas upon which we will paint a profitable EV Program.”

GM is also moving forward with their plans for a self-driving ride-hailing service to be introduced later this year in an unspecified city. Dan Ammann, the CEO of GM’s autonomous vehicle unit, said they still have plans to deploy fully autonomous vehicles without backup drivers, but they will probably introduce the system with more traditional vehicles that have steering wheels and other controls. To support this new fleet of EVs, GM has partnered with charging station companies like EVgo, Greenlots, and ChargePoint to collaborate on plans to integrate a network of over 31,000 charge points.

Clearly, GM has spent the past five years restructuring so as to course correct the direction of the company toward the electrification of all their remaining brand’s vehicles. What is interesting to note is that with the number of all-electric vehicles being introduced in 3 years time, they have decided to go the route of luxury by naming Cadillac the leading EV brand. This announcement has many auto experts suggesting the strategic move is an attempt to compete in the market with Tesla. Tesla may have a step up on Cadillac having already released several all-electric models to market, but they have continued to struggle with lowering production costs as noted by the perpetually delayed and long-promised $35,000 model that to date has yet to hit the market. And this is ground GM feels it can profit on, the moderately priced luxury EV market.GM President Mark Reuss commented that GM, “…is aiming to be the first automaker to build electric cars that are both profitable and attainable.”How will GM accomplish such a feat when companies like Tesla have already had a rough go at reduced pricing? Partly through reinvestment into EV technology from more profitable vehicle models. To make up headway and promote innovation, Reuss mentioned that it would also be investing earnings from its strong-selling models of today, like traditional pickups and SUVs, back into electrification.

The primary source for funding and innovation in electrification seems to be rooted in the restructuring GM has undergone to become a leaner, more profit turning company focused on high-margin crossovers, trucks, and SUVs; basically, the only vehicles selling in today’s market. GM’s transformation over the past four to five years has included trimming out the excess, cash-draining programs like the European Opel brand and the discontinuation of several car models. Unfortunately, in North America, this has also included cutting factory and white-collar workers as a handful of operating plants close down this past November; these layoffs included around 3,300 workers at four U.S. factories and 2,600 at a factory in Canada as well as over 8,000 white collar workers. CEO Mary Barra has said that the moves were necessary to transition GM to more electric and autonomous vehicles; while also giving assurances that based on current business conditions, she sees no further layoffs or plant closures through the end of 2020.

PAs Barra briefly touched upon, GM’s efforts to maintain capital have the dual purposes of investing more into electrification and autonomous vehicle technology as well as preparation for what they expect is a coming downturn in the traditional automotive sales. The actions will supposedly increase GM’s annual free cash flow by about $6 billion, including cost reductions of $4.5 billion and lower capital expenditure annual run rate of almost $1.5 billion by 2020. Along with all the restructuring and belt tightening, GM will also be looking to the federal government for additional funding requests. CEO Mary Barra reiterated from a company standpoint that the federal government needs to extend the $7,500 electric car tax credit indefinitely. The program in its’ current iteration only qualifies 200,000 vehicles for the tax credit before automakers enter a phase-out period. GM crossed the 200,000 at the end of 2018 and would greatly benefit from its extension as, along with the new electric Cadillac, they are scheduled to launch at least 20 electric cars worldwide by 2023. The new electric Cadillac will be a crucial piece of the luxury brand’s plans to reinvent itself to appeal to a new crowd of eco-friendly, luxury-minded clientele. Even more importantly, it will be a critical first step for General Motors moving toward complete electrification. according to Reuss, they have found the “sweet spot” for electric cars and are ready to tackle the luxury EV market.

Posted in New Vehicles