The Escalade was originally based on the GMC Yukon Denali, but was redesigned for the 2002 model year to make its appearance fall more in line with Cadillac's new design theme. Today, the Escalade and Escalade EXT pickup are two of only three Cadillac vehicles made outside of the United States. Both the Escalade ESV (Based on the Chevrolet Suburban) and Escalade EXT (based on the Avalanche pickup truck) were made in Silao, Mexico before the 2006 redesign; the new Escalade ESV is sourced from Arlington, Texas. The Escalade competes with the Range Rover Sport, Infiniti QX56, Hummer H2, Mercedes-Benz GL-Class, Toyota Land Cruiser, and Lincoln Navigator.
The introduction of the Lincoln Navigator in 1999 necessitated that General Motors be able to compete in the burgeoning American market for full-size luxury-type sport utility vehicles. This generation was only a five-seat SUV. The first Escalade was a largely unsuccessful endeavor from the start. Fearing the growing hegemony of the Lincoln Navigator, the Escalade was rushed through the design process to reach dealers quickly. Essentially little more than a badge-engineered GMC Yukon Denali, the SUV's aesthetics were similar and identical to the Denali and the final vehicle was smaller than the Navigator. The Escalade's wheels were borrowed from the Denali line, with the GMC logos on the center caps replaced with Cadillac's crest. The Escalade also used the same 5.7L Vortec 5700 V8 at 255hp (190kW), which was greatly underpowered compared to the Navigator's 300hp (220kW) and 365lb·ft (495N·m) 5.4 Liter InTech V-8. All first-generation Escalades featured Autotrac selectable 4x4.