General Motors Company (GM)’s Advantage

Can Cadillac be hip?
Thus, I believe that there’s room for Tesla Motors Inc (NASDAQ:TSLA) competitors in the luxury electric car market. Some consumers will prefer the flexibility of plug-in hybrids over Tesla’s full electric vehicles. The key question is whether the Cadillac brand can appeal to the sort of customers Tesla has won over. The average age of a Cadillac buyer is 65: This is probably not a good target demographic for alternative-energy vehicles.

However, the most recent entry in Cadillac’s vehicle lineup, the ATS, may be paving the way for the ELR. The Cadillac ATS is a luxury compact designed to compete with BMW‘s highly successful 3 Series. Earlier this year, General Motors Company (NYSE:GM) reported that 20% of ATS buyers are under age 35, compared with just 10% for the rest of the Cadillac brand.

If the ATS can maintain its current momentum, it will improve Cadillac’s image among younger car buyers. This could be a big asset in terms of boosting customer consideration of the Cadillac ELR. It also helps that the ELR has a very “sporty” look compared with the Volt.

The 2014 Cadillac ELR. Source: General Motors.

The ELR is a cool-looking car and appears to have a classy interior. The car also features some innovative features, such as paddles on the steering wheel that allow the driver to manually activate the regenerative braking system to slow the car while going around curves.

The Cadillac ELR is not expected to hit showrooms until 2014, but when it does, it will provide General Motors Company (NYSE:GM) with a credible alternative-energy car in the luxury segment. Based on Tesla’s success and the low sales for plug-in hybrids and EVs from mass-market automakers, the luxury segment may be the most viable market for these cutting-edge cars.

Foolish conclusion
There’s no guarantee that General Motors Company (NYSE:GM) will have any more success with the Cadillac ELR than it did with the Chevy Volt. However, deep-pocketed car buyers who can afford to pay extra for plug-in hybrid or electric vehicle technology will want an all-around luxury experience. The Model S offers that experience. By contrast, the Chevy Volt is a nice car, but not luxurious by any stretch of the imagination. By combining Volt technology with a premium Cadillac design, GM has hit upon a combination with better prospects for success.

The article Can GM Save the Chevy Volt? originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg has no position in any stocks mentioned. The Motley Fool recommends BMW, General Motors, and Tesla Motors and owns shares of Tesla Motors.

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