GM wants Cadillac to compete with Tesla

A few months back, General Motors Chairman and CEO Dan Akerson formed a small group to study how Tesla Motors could become a competitive threat to more traditional car companies.

Now, with Tesla on a roll, Akerson said GM will directly take on the upstart, California-based electric car company, even though he’s still unconvinced that there’s a large U.S. market for electric vehicles.

In this new war on Tesla, Cadillac is GM’s weapon. “If you want to compete head-to-head with Tesla, and we ultimately will, you want to do it with a Cadillac,” the CEO said at an event in Washington this week, according to The Detroit News.

Akerson gave kudos to Tesla for succeeding where a long line of EV startups have failed. “Does anybody even remember Fisker?” he asked. “I mean, there were a number of them; they are all gone.”

But despite Tesla’s strong sales in the luxury market and its skyrocketing stock price, the Goliath Akerson couldn’t help disparaging the David-like Tesla. “We’ll sell more Volts and lose less money … than they’ll lose on the Model S,” he said.

While GM in general and Cadillac specifically have staged a dramatic comeback from bankruptcy, Tesla has largely stolen the spotlight in the luxury segment since the launch of the Model S a year ago. The car recently aced Consumer Reports’ notoriously tough car tests and also achieved top scores in the National Highway Traffic Safety Administration’s five-star crash tests.

In addition to Tesla’s high sales and stock price, the company paid back $465 million in Energy Department loans nine years early. Tesla also became profitable this year, although due in part to the sale of California zero-emission vehicle credits and other credits.

The Detroit News also reported that GM executive Doug Parks recently said that the company is working on an EV that can go 200 miles per charge that’s expected to cost about $30,000. Upon hearing this news, Tesla CEO Elon Musk tweeted: “Am happy to hear that GM plans to develop an affordable 200-mile range electric car. Right target. Hope others do same.”

That includes Musk's company. Tesla revealed that it’s also developing a less expensive EV with a 200-mile range it plans to bring to market by late 2016.

Despite Tesla’s success and the fact that more EVs are becoming available, Akerson still has his doubts that the vehicles will go mainstream. “I’m not convinced that an all-electric car is the panacea that I think the American public wants,” he said.

He also thinks that even a 200-mile range EV may not be enough. While a battery that can provide 200 miles of electric-only driving is technically within reach, Akerson said “it’s not going to satisfy the range anxiety that persists. It’s still a major issue with the purchasing public and I think you’ve got to have a generator on board so that you basically have unlimited range."

Akerson didn’t confirm when GM would bring its next-generation Chevrolet Volt to market. But he’s betting on the Volt-based Cadillac ELR to take on Tesla. “I do think when the ELR comes out late this year, early next – it’s certainly in the same postal code as Tesla,” he said, “but now we’re going to move up.”

[Source: The Detroit News]

Source: MSN