Cadillac ELR vs. Chevrolet Volt 2.0

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NEW YORK ( TheStreet) -- General Motors (GM) recently introduced the Cadillac ELR, which is a 2-door coupe that builds on GM's current Chevrolet Volt. It enters production in the second half of 2013; the first deliveries are expected no later than January 2014.

It is now clear that the Cadillac ELR is not the Chevrolet Volt 2.0 under the skin. The changes, in terms of the drivetrain, from the current Volt are simply relatively minimal. Basically, there was some relatively modest tinkering in terms of how the battery interacts with the main electric motor, so as to squeeze out a little more power, that's all. But really all the essential parts of the current Volt drivetrain remain the same in the ELR.

The reason you want an ELR over the current Volt has to do with styling and an upgraded, plush interior of the highest caliber. The ELR loses back-seat space, and perhaps some luggage flexibility, but gains huge 20-inch wheels and spectacular "Bat-mobile" looks.

Cadillac has yet to announce how much it will charge for this new beauty, but it will surely be more than $50,000, especially considering that it looks as if it will only come one way: Fully loaded. The ELR will be in a class of its own in the market, and that gives it some pricing power. Cadillac hopes to sell 5,000 to 10,000 per year, and the car will be made on the same assembly line as the Chevy Volt.

So what does this mean for the Chevy Volt 2.0? It is now clear that the Volt 2.0 will be something completely different than the Cadillac ELR.

What is the No. 1 gating factor delaying the release of the Volt 2.0? The cost. Its battery, for one, costs several thousand dollars.

GM's chief objective with the Volt is to trim at least $4,000 off the cost of the Volt's battery. This will be possible -- the question is just when, and which supplier will help GM do it. Surely GM has been working on this for years already, the Volt 1.0 having entered production in November 2010, after engineering started in 2006-07.

Once GM has decided on this new lower-cost battery, the rest of the car is relatively easy to put together around it; it takes typically around 2-3 years. At this point, it's not yet known whether the Volt 2.0 will enter production in 2014 or if it will take all the way to 2015.

So what about this new battery in the Volt 2.0? There are several variables GM needs to consider:

1. Chemistry. This is as totally unknown as can be. It's a main driver of cost. There is a tremendous amount of research and development in this area. GM's current supplier is LG, the Korean company, but GM also uses A123 -- now a Chinese company -- for the battery in the Chevy Spark EV, which enters production this spring. There is no insight into what GM has picked -- or will pick -- for the Volt 2.0.