DETROIT General Motors Co (GM.N) will go head to head with electric car maker Tesla Motors Inc (TSLA.O) starting in January, when a plug-in version of its luxury Cadillac brand will go on sale.
GM said on Friday its 2014 Cadillac ELR plug-in coupe will have a starting price of almost $76,000 including delivery fees - putting it in competition with the similarly priced Tesla Model S. Federal tax credits could reduce the cost of the ELR to consumers by up to $7,500.
GM said the two-door ELR will be available nationally, unlike the Chevrolet Volt, which was rolled out first in select markets. Similar to the Volt, the ELR has an electric driving range of about 35 miles on the highway and a gasoline engine for extended range that gives it a total driving range of more than 300 miles.
The ELR will bring GM in more direct competition with Tesla's all-electric Model S, one of the top-selling pure electric cars. The four-door Model S starts at $70,000.
Given the price cuts GM and other automakers have put in place for their electric cars in recent months, analysts are unsure whether the U.S. automaker has realistic expectations for the new Cadillac. GM cut the Volt's price by $5,000 to $35,000 in August.
"The ELR makes a much bolder luxury and style statement than the Volt," Kelley Blue Book analyst Karl Brauer said. "That certainly justifies a higher price point for the ELR, but Cadillac can't deny the pricing reality we've seen with other advanced hybrid and electric vehicles.
"Consumers have traditionally balked at the price premium these cars require over equivalent, non-hybrid vehicles, and this has forced a wave of price reductions," he added. "Will a $75,000 ELR break this pattern? Cadillac is undoubtedly watching the success of the similarly priced Tesla and hopes to follow that car's lead. But I'm not sure that level of enthusiasm, and pricing, will transfer to the ELR."
The ELR is likely only the first step for GM in offering more luxurious electric cars. Doug Parks, the deputy for global product development, said last month that GM would look at doing other EVs in the $100,000-plus price range.
GM previously said the ELR will be sold overseas, including the critical Chinese market, later in 2014. Company executives have emphasized that ELR will be a low sales-volume car.
Production of the ELR is set to begin later this year at the company's Detroit-Hamtramck assembly plant, where the Volt is built. The ELR's introduction is part of an expected product blitz by GM's luxury brand, as the Detroit company may double its Cadillac offerings over the next four years.
(Reporting by Ben Klayman in Detroit)