GO
Loading...

Watch out Tesla, here comes Cadillac's ELR

For all the talk about the new Cadillac ELR driving a new chapter in plug-in cars for Cadillac and General Motors, one question hovers over those discussions: Is it a game changer?

More specifically, is the ELR a threat to the Tesla Model S?

The comparisons are inevitable since the new ELR will go on sale at a hefty starting price of $75,995. That's the neighborhood of the Tesla Model S, which has two versions starting at $72,000 and $82,000 (before a $7,500 federal tax credit).

Earlier this year, one Wall Street firm estimated the average transaction price for the Model S is $93,000.

In short, the ELR and Model S will be competing for sales in the rarefied air of models selling for more than $75,000.

Two different EV approaches

The ELR is not a pure electric car, which is the case with the Model S. That difference is huge.

Cadillac took the battery/power system of the Chevy Volt and wrapped it in a luxury car with all the styling cues of the current generation of Cadillacs.

(Read more:Nissan's big drive for global growth)

That's not to say the ELR is simply a rebadged Chevy Volt. It's not. From the 20 inch wheels to the suede-like accents in the interior, to the Cadillac CUE infotainment system, the ELR is far different from the Volt.

It is also completely different from the Model S, and not just because the Model S is a pure electric car.

Cadillac ELR extended-range luxury hybrid.
Getty Images
Cadillac ELR extended-range luxury hybrid.

Tesla has cultivated an image that makes it appealing to wealthy buyers who want an electric car as well as a luxury car. It's the reason Tesla has outsold other luxury gas powered models starting above $75,000.

Two brands, two images

Ultimately, the battle between the ELR and Model S will wind up being a battle between the Tesla and Cadillac brands.

In that regard, the success of the ELR will depend on how wealthy car buyers see Cadillac. Will those buyers cross shop and consider the Model S? Probably.

(Read more: What's automaking's hottest hub?)

Still, Tesla is positioned differently in that market. Its marketing is minimal and unlike Cadillac, its legacy is limited. For many buyers, that's appealing.

Conversely, Cadillac has been busy remaking its image in recent years. Its sales are up with the introduction of the ATS and the revamping of the CTS.

But until now, Cadillac has not been positioned as a true competitor to the Model S.

We'll see how much that changes when the ELR hits showrooms in January.

—By CNBC's Phil LeBeau. Follow him on Twitter @LeBeauCarNews.

Questions? Comments? BehindTheWheel@cnbc.com.

Symbol
Price
 
Change
%Change
GM
---
TSLA
---

Featured

Autos