Despite internal opposition and questions from the Treasury Dept., GM is still thinking of putting the Chevy Volt engine in a luxury vehicle
The Cadillac driver is hardly the target audience that springs to mind for electric cars. Battery-powered green efficiency seems an odd fit with Cadillac's brand image of power, prestige, and pampering. But Bob Lutz has long dreamed of an electric Caddy, so it may yet come to pass.
General Motors had been working on a gasoline-electric luxury car, the Cadillac Converj, with an eye toward producing a vehicle based on the drive system that will power the Chevrolet Volt. It showed a concept version of the Converj in January at the Detroit auto show. The car was shelved when some members of management and the U.S. Treasury Dept.'s auto task force questioned the economics of such an expensive model. But now some of the Converj's opponents have been pushed out in the wake of GM's bankruptcy reorganization, and Lutz—GM's powerful vice-chairman, who is in charge of design, marketing, and communications—and other executives are trying to find a way to get the car engineered and funded.
The Volt, which is supposed to go on sale late next year, is expected to lose money even after GM ramps up to its projected annual production rate of 10,000 cars. It may not break even until it reaches its third generation later next decade. GM had originally discussed making a car like the Volt for Cadillac and Buick, not to mention a small crossover sport-utility vehicle for Chevrolet, but some of the ideas were killed when budgets got tight.
As Opponents Exit, Converj Plans Revive
The Converj idea was effectively dead last spring. Former GM North America President Troy Clarke and Mark McNabb, who ran Cadillac, Hummer, and Saab before leaving the company in May, both opposed the idea. Clarke was squeezed out when CEO Frederick A. "Fritz" Henderson slimmed GM's management ranks.
With some of the opponents now gone, others still inside the company—especially Lutz—are pushing to find a way to build the car, say three sources familiar with GM's planning. The vehicle has not been approved for funding yet. Lutz declined to comment.
If built, the car would run on the same system as the Volt, which GM recently said would get 230 miles per gallon in the city. The Volt uses a small, four-cylinder gasoline engine to charge its battery and power an electric motor. It can go about 40 miles before the engine kicks in. The Converj could be tuned to get a little more power at the expense of fuel economy. But it would still have high mileage.
Lutz and some other executives think the Converj, which could get a different name if it goes to market, would do wonders to burnish the Cadillac image as a technology leader in the luxury market. If GM gives the car the green light, it wouldn't hit the market until 2014.
Appealing to Wealthy Green Crowd
"It's like a BMW Z8. You do it for the brand," says James N. Hall, principal of 2953 Analytics, a Detroit-area consultancy. "Plus, they could probably get $3,000 to $7,000 more in price than the Volt will."
There has been heated debate within GM about whether the idea should be resurrected. GM has done a lot of research on luxury buyers and hybrids, according to one source who worked on the project. The company concluded that traditional luxury buyers don't care much about hybrids or electric vehicles.
But one contingent within GM argues that researchers were talking to the wrong kind of consumer. Toyota's Prius owners make an average of about $100,000 a year, so they could afford something pricier than a $25,000 Prius, the reasoning goes.
At the same time, GM decided to kill a plug-in version of a Buick SUV because the car itself did poorly in consumer research.
If GM builds the electric Caddy, it could help it appeal to the wealthy green crowd, says Hall. "There's an argument that says the Volt should have been a Cadillac all along," he says. "Many Prius buyers would have bought a Lexus hybrid, but there wasn't one." Soon, there will be: The Lexus HS 250h is being launched this month.