The goal was to point out the new Cadillac range encompassed everything from the new CTS sport sedan to the Escalade to a luxury touring convertible built alongside the C6 Corvette. (The CTS appeared in The Matrix Reloaded the same year.) The message was that the brand with the newly redesigned laurel-wreath logo had changed forever.
Since then, Cadillac has redesigned its logo again, changed its alphanumeric naming system and launched ranges of vehicles to challenge competitors like Lexus and the German luxury brands. But it spent far too long focusing on sedans—the ATS, CTS, and STS were followed by the CT4, CT5, and now-defunct CT6—and only belatedly introduced crossovers and SUVs to fill the gaps in its lineup at a time when the U.S. market has moved decisively away from sedans.
None of that seems to have done much for Cadillac sales. In 2003, it sold 216,000 vehicles in the U.S. Its best year this century was 2005, when it sold 235,000. Last year, it sold 156,000.
Worse yet, the consensus among reviewers is that the sedans are good, but the utilities aren’t all that impressive. The XT6 and XT4 in particular have received negative to average reviews. That’s deadly at a time when three-row crossovers are the sweet spot for the Germans, for Japanese luxury brands, and even for Lincoln, whose new Aviator got the rave reviews the Cadillac didn’t.
As for the sedans, I’ve driven two CT4s recently; the CT4-V Sport version was decent fun, the Luxury version less so. But the question that kept crossing my mind wasn’t about the driving qualities. It was, “Why does this car even exist? Is the world still clamoring for a sport sedan from an American brand that faces off against the BMW 3 Series?” That doesn’t seem to be the case today. Even Cadillac’s most cutting-edge new vehicles feel five years out of date in their mission.
Cadillac vs. Tesla?
Now it seems Cadillac will reinvent itself again. Chasing Germans for 15 years hasn’t gotten them far, and now there’s a new and potentially more ominous maker to chase. That would be the company that was the subject of a GM board study way back in 2013 to determine whether it was a threat. The company concluded it was.
Remember, for many years, Tesla wasn’t remotely taken seriously by Detroit automakers. It came out of stealth mode in July 2006 with the Roadster, a crude electric performance car built by Lotus using Elise underpinnings and a big honkin’ battery made up of 6,800 small lithium-ion cells like the ones in your laptop.
Things change. In 2012 and 2013, while GM was selling compact hatchback Volt plug-in hybrids and Nissan the odd-looking Leaf with 74 miles of range, Tesla sold tens of thousands of sleek, expensive, long-range electric cars—and rolled out a nationwide fast-charging network for their owners.
First, GM tried to compete with Tesla via the 2017 Chevrolet Bolt EV—with a range and price roughly equivalent to the Model 3. At the time, it was the longest-range non-Tesla EV by far, but it was an upright compact hatchback, not a luxury sedan or crossover. And it was a Chevy.
As of June 30, Tesla had turned in four profitable quarters in a row—finally. Despite an erratic CEO and known quality issues, it’s become not only the most valuable automaker in the world but one of the most valuable companies in the world, period. GM desperately, angrily, jealously wants in on that action. It is so eager to get recognition for its coming portfolio of EVs the company is even “war-gaming” spinning out the EV side, according to a Bloomberg report today.
Now Cadillac will offer the Lyriq, presumably as a 2023 model, to go up against the Tesla Model Y (on sale since early in 2019). While the alphanumerics will remain for vehicles with combustion engines, its electric models will have names that are words. (Sort of.)
Other electric models include the Celestiq, an ultra-luxury large sedan that will be hand-built in a small, dedicated assembly plant in volumes of less than 1,000 per year and carry a six-figure starting price. Cadillac has also trademarked the Optiq and Symboliq names, very likely for future electric models yet to be discussed. And it showed the press a large, Escalade-like three-row SUV at its March “EV Day” preview.
Almost seven years after the GM board concluded Tesla posed a threat, then, GM is attempting to copy its playbook: Sell a range of luxury electric cars, at high prices, that are compelling vehicles in their own right, not just because they’re electric. But GM lacks Tesla’s inherent hype factor and rabid fanbase, and it seems perplexing that Cadillac has moved from fighting Germans—something it never really pulled off—to fighting a different foe, this time American and this time fully electric.
The EV War Starts In China
Auto journalists are notoriously parochial, in part because we get paid to write about the relevance of specific vehicles in our own markets. But the myopia is nowhere more pronounced than in what has become a dismissive pro forma nod by Detroit-based journos to “China” in coverage of electric cars. So let’s be very clear here.
China has become the largest and fastest-growing market for electric vehicles. It also intends to become the world’s largest producer of electric cars, just as it did in photovoltaic solar cells and is now doing in lithium-ion battery cells. The country has little innovation to contribute to combustion-engine powertrains, but it has long seen an opportunity to leapfrog that 130-year-old technology and take a leading role in the powertrains of the 21st century.
At both national and state levels, it pursues that goal with a few carrots offered to buyers and a whole lot of very big sticks applied to carmakers who want permission to sell in the world’s largest single market for new vehicles. To develop its rules for sales of so-called New Energy Vehicles, it consulted with the California Air Resources Board—for 40 years the most aggressive regulatory body in the U.S. on reducing vehicle emissions.
Then China took CARB’s model of requiring higher sales of zero-emission vehicle sales each year, and turbocharged it. And pumped it full of steroids. And injected some human growth hormone. And turned it up to 11.
The result was that Chinese purchases of cars with plugs in 2019 outweighed not only those in North America but those in Europe—added together. And that trend will continue. Not because Chinese buyers necessarily want electric cars, but because they will increasingly have no other choices.
That’s where Cadillac comes in. Since its 2009 bankruptcy and government-backed restructuring, GM has consistently signaled it will choose profitability over volume. The way to make electric cars profitable today is to sell them in higher segments. So electric Cadillacs will be required in China, and they’re clearly going to be more profitable than the smaller vehicle segments where Chinese buyers are among the most price-sensitive in the world.
Where Do You Live?
In fact, Chinese shoppers will learn more about the Cadillac Lyriq sooner than those in the U.S. Cadillac confirmed the Lyriq will be built and put on sale in China before the States, though it would not confirm that would take place during 2021.
There, Cadillac is a fresh, new premium brand, one without the “granddad’s luxury car” and “huge blingy SUV” images it may have in North America. But Tesla is a fresh, new brand there too, with a hugely popular high-tech image. And Tesla is already building cars in Shanghai—a far cry from its sole U.S. plant in heavily regulated California.
More importantly, sales of Cadillacs in China surpassed those in its home market back in 2017, and haven’t looked back since. That year, it sold 173,000 vehicles in China, against 156,000 in the U.S. In 2018 and 2019, it sold 228,000 and 213,000 vehicles in China, against 155,000 and 156,000.
So Cadillac’s largest single market is the one being forcefully moved away from internal-combustion engines to battery-electric vehicles. And that’s why the Lyriq will go on sale in China first, and likely sell in higher volumes there for several years than it does in the States.
From the March briefing to this week’s media call on the Lyriq, GM executives have consistently refused to discuss how China plays into their EV strategy: “We’re only talking about Lyriq in the U.S. today” is a common line. But the answer seems obvious: For EVs, China is far more important. In fact, it wouldn’t be surprising for GM to centralize Lyriq production in China and export to the States from there. After all, it’s done just that with the Buick Envision since 2016.
Optimists will note GM has said it expects many U.S. customers for its new generation of EVs to be conquests from other brands, not simply existing customers making the switch from gasoline to electrons within a familiar brand. In other words, EVs could expand GM’s overall market share.
Cynics might suggest GM is playing up EVs in North America—where adoption rates lag those of not only China but also Europe—only as part of an effort to convince financial analysts the company’s stock price deserves some of the same high-tech love (and value) Tesla gets. Given the absurd valuations awarded to companies like Lordstown Motors and Nikola, which have yet to sell a single vehicle, GM must be grinding its corporate teeth at its consistently middling stock price. At least Tesla had sold a couple of thousand cars before it went public.
So, ignore the next two and a half years of PR, promotion, promises, and hype about the Cadillac Lyriq. When it becomes available (“late in 2022”), go and test-drive it, and assess it on its own merits.
Note that before the Lyriq arrives in the U.S., you will also probably be able to buy an Audi Q4 E-Tron, a BMW iNext, a Nissan Ariya, a Volkswagen ID.4, and three or four other compact or midsize electric crossovers with 250 miles of range.
Meanwhile, you can buy a Tesla Model Y today.