The Cadillac Optiq signals a new wave of low-cost electric vehicle models
Cadillac has confirmed its upcoming fourth electric car model, the Optiq compact car, an entry-level electric car priced at $40,000. General Motors (GM) has lagged behind rivals like Hyundai (HYMTF) and VW (VWAGY) which are gaining more ground in the electric vehicle segment of the auto market.
Yahoo Finance’s Pras Subramanian reports on the new phase of low-cost EVs and what the transition to EVs could look like for GM over time.
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Julie Heyman: Well, in other automotive news, Cadillac confirms the fourth vehicle to join its expanding global electric vehicle lineup. Here’s the details with our car guy, Yahoo Finance’s Pras Subramanian. I don’t even know how to follow that. But let’s talk about Cadillac and this–this offer here.
Pras Subramanian: Yeah, the entry-level Optiq, as it’s — as it’s known, the entry-level Cadillac here, kind of like, I guess, the size of — the Chevrolet Equinox EV, which is the entry level subcompact- the size of the Ultium-based EV. I have reached out to Cadillac about this. They will not confirm or deny whether the Equinox size. But I think it is. So the Equinox EV costs about $40,000. So I assume this Optiq, the entry-level Cadillac, probably costs around $50.
They actually got the Lyriq now, which is a little bigger than that. It costs about $60,000. So I think that’s where Optiq will open. It’s the same size as the Model Y. It will likely compete in that space, in that small crossover area. So, one thing I want to point out is that in China, there is a similar model that has been rolled out. It’s powered by cheaper LFP batteries and two or one motor, depending on how you want to configure it. Not sure if this would happen here in the US. But it gives you an idea of how to cut costs for that car out there.
– It’s interesting, just a broader question, Brass, I’d love to get your take, these — these broader questions about the electric vehicle market, where it is and where it’s going. For example, there’s a good article in the Journal today about flat sales and a buildup of inventories. People are lowering their prices, like Tesla. When you talk to analysts, where do they see the market going from here?
Pras Subramanian: I think the big picture overall is that they’re — we’re going to use electric vehicles at some point. it will happen. It may not happen as quickly as people think. 2030 was the year we were thinking, at least the Biden administration wants half the cars to be electric. It may happen. It may happen. But it’s still far away. There are a lot of challenges related to pricing and infrastructure.
I think pricing is now the biggest issue. Many people can charge at home. So, it doesn’t matter if you don’t have a charger far away. For us, life is different in the city. But I think that’s the big problem, can you get cheaper cars here? The Cadillac Optiq will be one of those cars.
Julie Heyman: And how did Cadillac’s other electric models sell in the first place? And secondly, you know, we talk a lot about Tesla and Ford and General Motors. But, for example, Hyundai has a range of electric and hybrid cars. VW has got – you know, these things seem to be gaining some interest as well. So what does a fuller scene look like?
Pras Subramanian: You know, GM was late to the game because they wanted to develop that Ultium platform. And they didn’t have a lot of Lyriq sales. I think only a few thousand so far. This is the only electric car they have. The other electric car they have–
Julie Heyman: Through Cadillac.
Pras Subramanian: Through Cadillac. right right. GM has slightly delayed sales of the Silverado EV. Right now, they only sell the work truck, which is similar to the professional model. So–but you’re absolutely right. VW has been working hard with the ID.4 and cars like it. Hyundai and sister brand Kia really kill it from a size standpoint, and the car point of view – well-reviewed cars. They just introduced the new IONIQ 5 N, an electric sports car, at the Los Angeles Auto Show. Looks great. People love that car. It can also do two-way charging. So you can charge things at your home. This– I mean, these people really do–
Julie Heyman: To me, that’s the subtle thing that doesn’t get as much attention because we talk about Tesla all the time.
Pras Subramanian: right. And I know you guys talked about the Amazon thing that they did by partnering with them to sell cars. So they’re definitely moving the needle there with the mass appeal and mass selling of EVS in this country.
– Good. Brass, thanks for joining us, sir.