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Zero Hedge

Cadillac's Death-Dive

Via Eric Peters' Autos blog,

Cadillac has been losing sales and market position for the past three years straight, but thinks it has The Answer.

Want to guess?

If you said electrification, go to the head of the class. It’s the obvious answer, though. As the Lemmings rush toward the cliff, GM wants to be in the lead.

Cadillac head Mark Reuss thinks people will buy Cadillacs if they don’t have engines. Or at least, if they also have batteries (i.e., are hybrids). Because as everyone knows, luxury car buyers are absolutely frantic about the gas mileage delivered by their vehicles and also clamoring for a car that goes half as far and takes five times as long to get going again, the speciality de la Maison of electric cars.

“We’ve got one chance. This is it,” Reuss told Automotive News last week.

“We will leave nothing on the table, but we’ve got to get there. … We’re going to get there.”

But where is that, exactly?

EVs constitute about 1 percent of total car sales. Let’s say that rises to 10 percent – via production quotas. GM will need to capture pretty much all of it to even begin to make up for the losses it has already suffered.

And every sale will still be a loss – because no one has figured out how to make money on electric cars.

Money is transferred – from the taxpayer, via the government – to the manufacturer and the buyer. But that is not economically sustainable. If it is economically sustainable, then Huey Long was right and it’s time for an electrified chicken in every pot, paid for by everyone sticking his paw (via the government) into his neighbor’s pockets. It brings to mind that scene in National Lampoon’s Christmas Vacation, the movie starring Chevy Chase and Randy Quaid, where Quad’s character goes shopping with Chase’s character’s wallet and urges him to “pick something real nice” for himself.

In the inbred, insular world of the upper echelons of GM – which moved its Cadillac headquarters to New York City, where most people don’t need to drive and therefore generally don’t own cars, let alone Cadillac cars – this is considered rational thinking.

It is so considered because the upper tiers of GM management (and it’s not just GM) swim among the like-minded, who no longer have a clue what the real world is like nor seem very interested in learning about it.

They are like the peddlers of Toxic Masculinity and Diversity (which GM is, too) and take it as a given thing that everyone out thereagrees with their views and if not, well they’ll be dragged along.

The difference here is that GM (like Gillette, which is no longer the “best a man can get”)  hasn’t got the power to force those people to buy its products – and many have decided not to.

More will.

Attempting to peddle electric cars isn’t going to work for the same reason that Nancy Pelosi isn’t going to take down the wall around her house or remove the armed security detail which protects her.

Electric cars are a loser.

They are a Potemkin Village on wheels, a facade that will come down once the rickety framework of government mandates and subsidies which supports them disappears and even if not for the simple reason that they are not economically sustainable. You cannot make money selling things at a loss – and if you insist on trying, after awhile, you will no longer be in business.

And because people (most of them) cannot afford to spend 30-40 percent more for a new car, even if they want to virtue signal – and don’t mind going half as far and waiting six times as long to get going again.

Reality eventually bites.

So what will happen is GM will build a fleet of EVs that don’t sell – like previous GM EVs, which all failed and had to be pulled.

And Cadillac will be the first lemming to leap – joyously, perhaps – over the edge of the cliff.

*  *  *

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