Cadillac’s decision to continue building combustion-powered vehicles well past the next decade comes at an awkward time for the luxury brand, which now has more electric vehicle offerings than combustion models after recently discontinuing several gasoline-powered vehicles.
Cadillac Reconsiders Its All-EV Strategy
It is becoming increasingly clear that achieving a fully electric lineup by 2030 is difficult, if not impossible. Many automakers have backed away from those plans and adopted a multi-pathway approach to powertrains, keeping combustion power in the mix through pure combustion, hybrid and plug-in hybrid vehicles.
Cadillac was among the more recent brands to make such an announcement. In July, the brand said it would continue building combustion-powered vehicles well past the next decade.
While Cadillac traditionalists will likely welcome the decision, the timing presents a challenge because of changes already underway in the lineup.
Cadillac’s Combustion Lineup Has Shrunk
Two combustion-powered Cadillac models were discontinued last year, while another recently ended production this year. Those models are the XT4, XT6 and CT4.
The CT4 remains available but will be gone by next year. Meanwhile, the current-generation CT5 will end production this year, although a next-generation model is planned.
The XT4 and CT4 might not receive new generations. The changes leave Cadillac in an unusual position: despite its commitment to continued combustion vehicles, the brand now offers more EV models than combustion-powered models.
Dealers Brace for More Challenges
Automotive News reports that Cadillac dealers are bracing for difficult conditions ahead. The situation is compounded by the brand’s sales slump this year, which has been driven mainly by the tax credit shift and cooling demand for EVs.
Ed Williamson, CEO of Williamson Auto Group, told the publication that the midsize crossover market will be a significant challenge.
“It’s the midsize crossover market that’s going to be the challenge. I think [GM CEO Mary Barra] did a disservice to the Cadillac dealers in not figuring out a way to reload XT5 and XT6 sooner,” Williamson said.
Paul Waatti, director of industry analysis at AutoPacific, also pointed to a key issue with Cadillac’s strategy.
“Cadillac built some of the right EVs, but made the wrong assumption about how quickly its customers would stop wanting everything else. The mistake was treating EV and ICE too much like a handoff rather than parallel businesses,” Waatti said.
No Immediate Stopgap for Cadillac Dealers
Cadillac’s decision to drop the XT4 and XT6 from the range has added to the challenge, particularly because both were steady sellers for the brand.
The XT6 is expected to return with a new generation, but it will be absent from showrooms for a couple of years. That leaves Cadillac without an immediate replacement at a time when dealers are already facing pressure.
No model can serve as a stopgap, either. For now, Cadillac dealers will have to convince shoppers that anyone looking for a crossover other than the XT5 will have to choose an electric model.
That will be a difficult task for dealers facing strong headwinds. The Escalade continues to sell well, but Cadillac cannot rely on a single model to carry the brand’s sales.
