Cadillac's Electric Answer To Tesla's Model S Is About To Hit The Market

In January, Cadillac will begin selling its first electric car for a base price of $75,995. That luxury price makes it a direct competitor to Tesla's Model S.

So how does the plug-in hybrid ELR compare with the all-electric Model S?

In terms of styling, the ELR is similar to the Cadillac CTS, ATS, and XTS sedans. That's a good thing - we like all those cars.

Running on electricity and gasoline, its range should exceed 300 miles, which matches the Model S (though Tesla uses only electric power).

Both cars come with various luxury bells and whistles, plus the promise of good service and a solid warranty.

The cheapest Model S starts for $71,070, not including a $7,500 federal tax credit. GM anticipates that the ELR will also qualify for that credit, which depends on IRS certification.

Without getting behind the wheel of each, we can't make a final call. But right now, we'd buy the Model S - if only because it is widely recognized as a remarkable, revolutionary vehicle, and the ELR is unproven so far.

So why the Tesla-level price tag for the Cadillac entry? It's especially surprising given that in August, GM slashed the price of the Volt by $5,000, a tacit admission that few consumers are willing to pay a large premium for cars that offer limited range.

Karl Brauer, a Kelly Blue Book senior analyst, said Cadillac must hope to follow the lead of the Model S, but cautioned, "I'm not sure that level of enthusiasm, and pricing, will transfer to the ELR."

Eric Ibarra, director of residual value consulting at KBB, called the ELR pricing "a bold move," but notes "Cadillac has proven quite successful lately at pricing its products with a 100% premium compared to its non-luxury brands."

So the message from GM seems to be: The ELR will be just as good as a Model S, and it's worth just as much of your money.

Here's where GM's size advantage over Tesla comes in: It can afford a failure. If sales of the Model S suddenly stopped tomorrow, Tesla would quickly go out of business. If no one buys an ELR, it will hurt GM financially, but won't kill it.