Cadillac ELR: Here's The Chevy Volt 2.0, Due Jan. 15

NEW YORK (TheStreet) -- Tuesday morning, General Motors (GM) notified the world it will be unveiling theCadillac ELR in Detroit on Jan. 15.

It enclosed a semi-blurry picture confirming the spy photos that have been circulating over thelast year.

It is expected the Cadillac ELR will enter production in thesecond half of 2013, more likely the fourth quarter than the third.It should be in showrooms by January 2014, perhaps earlier. Iestimate the price before tax adjustments will start at $47,400.

How will the Cadillac ELR differ from the current Chevrolet Volt?

1. It's a two-door coupe, with dimensions otherwise similar to thecurrent Volt. This means the rear seat room will be even smallerthan the current Volt. In the Volt, two adults who are 5'11" can sitcomfortably, even though there is no extra space -- but they fitsitting straight up, which you can't say about many other compactcars.

In the Cadillac ELR, the rear headroom looks to be constrained, so Isuspect that you would have to be meaningfully shorter than 5'11" inorder to fit comfortably. Add the inconvenience of only two doors,and the reasonable practicality of the Volt has been compromised.Luggage space is estimated to be similar to the Volt, which is to sayacceptable.

2. The dashboard and interior will be better than the Volt. From theleather seats to the knobs, dials and the displays there will beobvious advancements here. Given the learning curve as well asMoore's Law, it may even be cheaper to assemble. So if you arestrictly two people and you don't need the rear seat access, theCadillac ELR will represent a strong improvement.

3. Powertrain: This is the biggie. The ELR likely has obtained anevolved Volt drivetrain, breaking into the following parts:

A. Battery: Capacity will be 16 kWh, because that's where the taxbenefits max out ($7,500 Federal tax credit). However, the actualbattery will at a minimum be cheaper to manufacture, and it may havean improved cooling/heating system. It will likely be lighter, and itmay be slightly smaller.

B. Gasoline generator: It will most likely be beefier than thecurrent 1.4 liter derived from what is in the Chevy Cruze. Rumorshave suggested a 2.0 liter engine, and this sounds reasonable.

C. Electric motor(s): It will likely be beefed up from the current111 kW (main traction motor) and 55 kW for the generator-motor. Thisis what determines acceleration, so it will be needed in order todifferentiate from the Volt.

D. Transmission: Most likely, it will remain unchanged in principlefrom the Volt. It may be modified in some direction, but GM has a lotinvested in this architecture, and it seems to have performed superiorto the competition in the real world, with approximately 50,000 Voltsmanufactured for world-wide consumption, and some 40,000 soldworld-wide to date.

E. Electric range: The Volt averages 38 miles. The refinements inthe Cadillac ELR, in combination with the greater power, should keepthat approximately the same, with a tiny increase possible.

F. Gasoline performance: The Volt manages 35-40 miles per gallon, according to the Environmental Protection Agency. Unlike some of the well-publicized competition, owners appear tobe at least meeting, and typically beating, those numbers, especiallyin non-freezing climates. The ELR could improve on this further,possibly to around 45 mpg.

G. Gasoline range/tank: The current 9.3 gallon in the Volt hasproven to be more than plenty for most people. I imagine they willkeep it around nine gallons, but I wouldn't be surprised if they decidedto shrink it to seven to eight gallons, or even less. It's just not needed.

3. Thermal management - for the passengers: The Volt has poor heatand windshield defrost. This will need to change in the ELR.

4. NVH (noise, vibration and harshness): Much improvement expectedhere, over the Volt. Compared to the Tesla Model S, the Volt has toomuch vibration and noise coming from the wheel wells and suspension ingeneral.

5. Profitability of manufacturing: GM's profit on the Cadillac ELRshould be improved by thousands of dollars compared to the ChevroletVolt. Why? Mostly because of the lower-cost -- but better-performing-- battery. This is the single most important component by far, withthe whole battery pack cost approaching $10,000. If you can cut thisin half, that's $5,000 right there.

Now for the bad news. Let me preface this by saying this that I amthe biggest fan in the world of the Volt. I have driven the Volt20,000 miles and recommend it to everyone for whom the size of the carfits their needs.

The Cadillac ELR will be a wonderful car -- for a two-door coupe. Hereis the problem: I don't hear a lot people asking for two-door coupes.When people buy or see the Volt, they want the next car in the Voltfamily to be a minivan or SUV. Tesla has understood this with theModel X minivan, which will enter production only a month or two afterthe Cadillac ELR.

Ninety-five out of 100 people with whom I speak about the Volt say they want a six- or seven-passenger Volt in minivan or SUV format, and with a lot ofluggage space. They want a much taller car, so that an elderly personcan slide into it without having to sit down as if crawling down intoa Corvette. They want bigger doors.

I have absolutely nothing against the Cadillac ELR. What GM shouldhave done before the ELR, however, was to make a much longer andtaller version, with three rows of seats, even with a center tunnel thatwould make it a two+two+two-seater for a total of six people. The car wouldbe at least a foot taller. The battery size could stay at 16 kWh, andconsumers would be prepared to pay whatever it would cost -- $59,900,whatever.

The problem with the Cadillac ELR is not in the execution of theengineering. I'm sure it will be flawless and be the leader in itsclass. The problem is that it is a small class. What is the marketfor a $47,400 (and up, before tax incentives) two-door coupe? I imagineno more than 1%-3% of the market.

On the other hand, the market for a three-row, six-seater version inSUV/minivan format would be a lot larger than 1%-3% of the market. Asit stands, the Cadillac ELR does not expand the market much beyond theChevrolet Volt, which is so good as it is.

One really has to wonder:Who at GM was responsible for the product planning of this? Does GMnot speak to real people, including the existing Volt owners, askingthem what other car they would like to buy?

Why is it that almost everyone one I know are praying for a "Volt"minivan or SUV, but GM runs off and makes a two-door coupe with tinyinterior space? There is place in the market for a whole family ofVolt minivans and SUVs in different sizes -- from six to eight passengers,from a lot of luggage space, to giant spaces -- but the room in themarket for a two-door coupe is likely very small, especially consideringthe Volt is already in the market and is more practical.

I look forward to driving the Cadillac ELR in 2013, but what so manypeople in the market are clamoring for is the same drivetrain in amuch taller car that can fit at least six people and a lot of luggage.Think Dodge Caravan or Chevrolet Suburban -- with the Volt/ELRpowertrain.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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