After a painfully slow start, the Cadillac Lyriq is finally gaining traction. The all-electric SUV made up 12% of the luxury brand’s sales during the final quarter of 2023 — and is on track to double that this month, according to brand boss John Roth. That buoys confidence as Caddy gets ready to roll out four more EVs in the coming year.
After surging eightfold between 2019 and 2023, the EV share of the U.S. market flattened out during the second half of last year, some analysts questioning whether demand could actually dip in 2024. But don’t tell that to John Roth, the global head of General Motors’ Cadillac division.
The luxury brand’s first EV got off to an unexpectedly slow start after its 2022 launch, reflecting a variety of problems with GM’s new Ultium platform and battery technology. But with most of those issues now under control, “production continues to ramp,” Roth said during an online media roundtable Thursday afternoon. And the impact is substantial.
The first of five EVs the brand has now announced, the two-row Cadillac Lyriq accounted for 12% of the brand’s fourth-quarter retail sales. Even then, that equaled just 9,154 of the EVs last year. But volume could increase substantially considering Lyriq made up about 25% of all Cadillacs sold during the first half of January, Roth said. Overall, battery-electric vehicles made up just over 8% of the retail market last year.
Lyriq defies gravity
“The luxury market is operating at a bit of a different level than the mainstream” EV market, said Roth. That should come as no surprise, however, as the average battery-electric vehicle went for just over $50,000 in December, according to data from Cox Automotive, a premium of more than 10% compared to the typical gas vehicle.
The increased demand for Lyriq comes at a time when the EV market is feeling the impact of rule changes covering federal tax incentives. Under the Inflation Reduction Act passed by in 2022, electrified vehicles – including both all-electric and plug-in hybrid models — must meet domestic new requirements covering not only the location of vehicle assembly but the sourcing of batteries and their critical minerals. As of January 1, only 14 models qualify — a roughly two-thirds drop from 2023. Lyriq was one of the EVs that dropped off the list.
To minimize the impact, GM is covering the up to $7,500 in lost incentives on products including the Lyriq. As a result, said Roth, Cadillac is “keeping sold orders” that weren’t delivered in 2023, “while we continue to work” on making the necessary changes “to requalify” for the federal tax credits.
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Floating the boat
While the CT5 sedan is Cadillac’s bestselling product line worldwide, the surge in Lyriq demand helped the brand bounce back last year from the double-whammy of COVID and semiconductor shortages. Overall U.S. sales were up 9.3% in 2023, retail volume rising 8.4%.
Other factors came into play, including the strong showing of Caddy’s V-Series performance models. And, defying conventional wisdom, the luxury brand has had strong demand for sedan models like the CT5 and CT4, even as buyers by the millions continue to migrate to SUVs and CUVs.
“Our sedans are really gaining momentum,” said Roth, noting that global demand for four-door models rose 11.5% in 2023. The CT5, in particular, experienced a 23.7% sales surge.
After years of trimming back on its retail network, Cadillac wound up adding new dealerships and filling vacant sales points in places like New York City and Atlanta, said Roth.
More EVs coming.
Now that production volumes are on the rise, Caddy officials are hoping they’ll face less trouble with the rollout of its upcoming wave of all-electric models.
That includes a battery-powered version of the brand’s biggest SUV, to be called the Cadillac Escalade IQ. And with a new halo product, the almost entirely hand-built Celestiq supercar, Caddy takes aim at the likes of Bentley and Rolls-Royce. The GM flagship recently announced two lower-priced EVs, the Vistiq and Optiq.
All four models should be rolling into showrooms by mid-2025, with more EVs in the works. Cadillac has laid out plans to go 100% electric by 2030, five years ahead of the target announced for GM, as a whole, by CEO Mary Barra.
As with its gas-powered models, Cadillac is betting that there’s a market among EV buyers for high-performance models.
“We will offer performance variants no matter the propulsion,” Caddy spokesman Mike Albano told Headlight.News. “We will show an interpretation of what the V-Series would look like in EV form this year.”
It is not clear which of the five EVs Cadillac so far has announced will be the first to offer a V-Series option. Eventually, it’s expected by many observers that there will be high-performance variants for most, if not all, of the brand’s EVs.