To Boost Slow Cadillac ELR Sales, GM Offers $5,000 Test Drive Incentive to Dealers

Test driving a new car at the dealership is an integral part of the new car buying process. If carried out in the correct manner, it can even make the difference between buying or not buying a car, so it’s logical to assume that auto dealers would want to go out of their way to offer as many different cars for test drive as possible, marking one of each car they sell as an official test-drive vehicle.

2014 Cadillac ELR

GM is struggling to sell the luxury plug-in Cadillac ELR range extended EV.

Yet it appears that doesn’t always ring true, so much so that General Motors is paying out a bounty of $5,000 to any dealer willing to offer test-drives in its Cadillac ELR range-extended luxury EV.

According to Automotive News (subscription required) GM is trying to combat slow sales of its luxury plug-in coupe by rewarding dealerships who are prepared to designate one of their Cadillac ELRs an official test-drive vehicle.

But why is Cadillac struggling so much to sell the ELR?

Starting at a base price of $75,000 before Federal and local incentives, the Cadillac ELR isn’t exactly cheap. In fact, its sticker price puts it in the same price bracket as the Tesla Model S.

Yet the Cadillac ELR’s specifications don’t compare well to the Model S. Based on the Chevrolet Volt extended range electric car, the Cadillac ELR has an all-electric range of around 35 miles and a 0-60 time of just under 8 seconds. For less money, it’s possible to buy a 60 kWh base-model Tesla Model S, which manages 0-60 in 5.9 seconds and manages 200+ miles on a single charge.

A premium car, the Cadillac ELR will never sell as well as the far cheaper mainstream Volt on which it is based. But the ELR’s poor sales figures to date aren’t just due to tough competition from the longer-range, Tesla Model S. It’s down to something far more frustrating for General Motors: dealer apathy.

2014 Cadillac ELR

Based on the Chevrolet Volt, the ELR retails for $75,000 before incentives.

In order to sell the Cadillac ELR, dealerships have to sign up for an estimated $15,000 of training for sales and service staff. Although the training is similar to that given for the Chevrolet Volt, the cost analysis is very different.

For a start, a premium $75,000 luxury car will never sell in the same kind of numbers as a $30,000 hatchback, meaning the amotrization of investing $15,000 in training takes longer for the ELR than it does for the Volt, despite the ELR’s far higher sticker price. Cadillac’s own ad campaign for the ELR didn’t help either, portraying ELR drivers as arrogant, self-made men who loathed taking time off work. 

Couple this with mistrust of electric vehicles among more traditional dealerships in areas without strong plug-in car support, and it’s no surprise GM is having to dig deep to encourage dealers to offer test drives.

With GM’s own inventory of the ELR now totalling 1700 cars — more than 725 days’ worth of supply in an industry where 60 days’ supply is considered healthy — something needs to happen soon.

Self-aggrandising self-made man? You want a Cadillac ELR, this ad seems to say.

We’re not sure if poor sales had anything to do with Cadillac’s terrible Poolside ad, but it might

General Motors has said that dealers have until June 2 to officially designate one or more ELRs in stock as ‘demonstration cars.’ If the dealership in question has less than 7 ELRs in its inventory, only one car may be designated a demonstration car, but if there are more than 7 ELRs in inventory, the dealership may assign two cars to demonstration roles.

In order to receive the funds, dealerships must complete at least 750 miles of test drives in their designated demonstration cars.

The incentives aren’t stopping there either. GM is offering customers up to $3,000 in purchase incentives for each and every customer, be they leased, financed or outright purchases.

But will it be enough to tempt people into the ELR? Or does the Tesla Model S simply outclass the ELR? Leave your thoughts in the Comments below

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