When You Can’t Give ‘Em Away…

When you have to resort to paying people to buy something, it ought to tell you about the value of the thing you’re trying to “sell.”

Such thoughts apparently haven’t occurred to GM, which continues to describe the Volt-based (and twice-as pricey) Cadillac ELR electric car as a “combination of leading technology with stunningly attractive design” that is “is unlike any other coupe in the luxury segment.” So says Cadillac jefe Johan de Nysschen.

Poor dude.

He has to put on a brave face. It’s his job, after all. Like the captain of a sinking liner, he must calm the passengers so that a panic does not erupt.

GM ought to be be panicking about now.

The ELR is a belly flop of such magnificence that it makes the Volt on which it’s based look like a 9.8 (out of 10) on the Olympic high dive scorecard.

Yes, it’s that bad.

Sales last year (if you want to use that word) amounted to barely half (1,310) what GM’s own internal projections (2,200) had hoped for. It is not especially difficult to fathom why this happened.

The ELR – last year – stickered for $75,995. This is a lot of money. It is in fact sufficient money to purchase, say, a Mercedes E-Class coupe($61,350) with a twin-turbo V6 and have something like $14k left jangling around in your pocket for gas money. Granted, the electric Cadillac does not require gas money at all. But given it can’t outrun a V6 Accord or similar (which costs less than half what Cadillac expects people to pay for the ELR) much less a car like the Benz E coupe, the “savings” has the same appeal as paying $300 for a night at Motel6.

Mind, this is the “updated” 2016 version. The original ELR could not outrun the four-cylinder versions of cars like the Accord.

Also, it’s not true that the ELR won’t cost you anything to feed beyond whatever the going rate is for electricity. Like the Volt, the ELR is really a hybrid – like the Toyota Prius. It carries around a 1.4 liter gas burning engine that kicks on when the electric batteries begin to get ED… which happens after about 40 miles of driving. The gas engine operates like a portable Briggs & Stratton generator, burning gas to make electricity, to keep the car moving. At this point, the efficiency of the ELR (if you wish to use that word) declines to less than that of many current mid-sized sedans with four cylinder engines (and no batteries or electric motors) that cost less than half what GM expects people to pay for an ELR.

You can expect to average mid-low 30s until you can get the thing home for a plug-in session. Meanwhile, the ’15 Nissan Altima I recently test drove (review here) is capable of 40 on the highway with its standard four-cylinder engine. A VW Passat diesel will give you 45 or more – for less than $30k. And the Toyota Prius – which constantly cycles between its gas engine and its electric motor rather than sucking the batteries dry and then running exclusively on the motive force generated by the gas engine – will give you 50 or more, for about $24k, if you’re careful about the options.

And so, GM is falling back on the inevitable – deep discounting. $10k will be lopped off the sticker price for 2016. This is a sure sign of desperation. No car company ever resorts to discounting unless the cars are just not selling, notwithstanding a “combination of leading technology with stunningly attractive design.”

But even with a $10k haircut (and on top of that, a federal bribe in the form of a $7,500 tax credit) the ELR is not going to pull out of its tailspin. Because – like the Tesla – the concept is fundamentally flawed.

No, wait. Something stronger is necessary here. It is fundamentally ridiculous – an outrage upon common sense and market wants.

To borrow an electrical term, there is a disconnect here.

People with the means to purchase a $75,000 (or a $65,000) vehicle fundamentally do not have to sweat the price of fuel – or of getting from A to B. Yet this is the primary – the essential – market appeal of the electric car. It is the compensation one receives (theoretically) in exchange for limited range and other functional deficits vis-a-vis a gas-powered car. Take away economy – not just of operation but of acquisition – and what are you left with?

Yes, exactly.

An expensive functionally compromised car.

And who – except for a few (there are always a few) will buy such a car?

Does it take an MBA to grok this? Apparently, that’s precisely what’s needed. Or rather, not.

Some people are too smart for their own good. Or rather, too degreed for their own good.

Of course, none of this would be happening at all were it not for the distortions created by crony capitalism and the rent seeking that characterizes it. Meaning: If GM or any other car company built cars – authorized the building of a car – knowing it was sink or swim, that the car would have to sell on the merits (without government shivving the taxpayers and funneling money back to the automaker to subsidize politically driven product) the ELR and cars like it would have maybe been rendered as one-off concepts for people to look at, but nothing more.

Because the idea is preposterous.

And it does not take an MBA to grok it.

For an electric car to be economically viable – as opposed to politically desirable (in some quarters, perhaps) it must above all else be less expensive to acquire and operate than otherwise similar cars. Period.

Performance – and “combination of leading technology with stunningly attractive design” – are maybe applicable considerations when you’re shopping for a car like a Porsche 911 or Corvette. But they are non sequiturs when the object of this exercise is – or ought to be – figuring out a way to get from A to B for less.

Until the electric car can do that, it will never be mass market viable. Which means it will never be more than a toy. Which would be fine – if the rest of us weren’t held up at gunpoint and forced to “help” subsidize their existence.

Why do we put up with it?

When you have the answer, send it to me at my Gettysburg address… .