Why Fiat's CEO saying "don't buy our electric cars" makes perfect sense

Fiat is not alone among the world’s leading automakers in thinking that EVs are not working out. Toyota feels the same way.

Fiat’s chairman, and respected automotive industry leader, Sergio Marchionne, has come out and said it. EVs are not working out the way many had hoped. If the leader of just one of the top five largest auto companies on Earth had the guts to do this it would be easy to say it is just one person’s opinion. However, there is the also the fact that Toyota is saying the same thing and more. Toyota is the largest automaker and the largest retail supplier of automobiles in America.

This week Mr. Marchionne offered up a plethora of excellent little quips. For example, Reuters reports that at an auto conference Wednesday he said with regard to the near micro-car, Fiat 500e (electric), "I hope you don't buy it because every time I sell one it costs me $14,000, I'm honest enough to tell you that." In case that wasn’t completely clear he also said "I will sell the (minimum) of what I need to sell and not one more. If we just build those vehicles, we'll be back asking ... in Washington for a second bailout because we'll be bankrupt.”

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Comments

It's almost impressive how much money Fiat manages to lose on each 500e. Worth pointing out: Mitsubishi says it can turn a profit on the $23,000 i-MiEV. As for Toyota...all I can do is give another exasperated sigh. Hydrogen just doesn't compare to EVs. I'm a firm believer that by the time fuel cell vehicles approach the current cost of electrics, and come up with the money to build enough refueling infrastructure to service even a fraction of the country, battery electric technology will have advanced far enough that EVs will no longer have any significant disadvantages.
Green Car Reports estimated (correctly I think) that the Toyota RAV4 EV uses $40K worth of drivetrain components for each vehicle. By my math, Toyota loses twice as much on each of those as Fiat does on the 500e. Do you think the Mitsubishi folks are being truthful about the profitability of a car they have sold 40 of in 2014?
Maybe not, but they sell far more globally. They crossed the 30,000 mark more than a year ago, although I couldn't find updated data in my brief search.
The Fiat 500e is a compliance car what were they expecting? If they were sold in larger number the unit cost would drop but seems they never figured it out.
The dealership I bought my 500e from seems to be selling 10 or so per week; I don't think they have any trouble moving them.
As we learned with the EV1, government mandate or regulation can push EVs only so far. All the companies who are making EV because they "have to" will not try to develop a good money making EVs. Elon Musk recognized this and said that only good commercial competition will drive companies to get serious about this. But seems that so far hasn't prompted at least Toyota and Fiat/Chrysler to do so. Their loss. Looks like BMW is making a better money making EV with a waiting list, like Tesla.
Let's make a very clear distinction - Fiat and Toyota (and Honda as well) are avoiding EVs because they WANT to, not because EVs aren't viable. Some OEMs have a culture that celebrates internal combustion as part and parcel of the concept of "car". Others are more open-minded. Nissan and Mitsubishi are doing very well with EVs simply because they want to. Chrysler and Toyota have just eliminated themselves from consideration the next time I need a new car, either EV or internal combustion. Toyota's announcement about developing fuel cells instead had me very confused. I agree with Luke O that FCEVs are very unlikely to catch up with EVs in cost and practicality. So if EVs are supposedly not ready for prime time yet, why would any company devote their time instead to another technology that is even farther from practical use? How can that possibly make sense? Now I have my answer - hundred$ of million$ in grants from CA. Always follow the money.
As a participant in the Humbold State University FCEV developement program of the 1990s, I disagree. Fuel Cell enabled EV generation is viable, as demonstrated by the Honda "Stack" FC. As detractors point to hydrogen refinement from fossil fuel as being redundent, boardering on the obsurd, I'd like to remind EV fans that Hydrogen can( cost) effectively be retrieved from trash dump or green bio-generated methane gas. And yes, these systems can be infinetly more effective when intigrated with brake co-generation. Yes Luke, battery technology will improve expotentialy as it has over the past 100 years. However, a standalone EV will allways be dependent on a 2nd party($) managed charge source.
I'm really not sure what you mean by a "2nd party managed charge source"?? As far as I know, most BEV charging is done at home, usually overnight. To me that seems a lot more convenient than going to a gas station. I'm looking at hydrogen cars and wondering why anybody would want one. What is the selling point? It looks like they only offer limitations and higher costs relative to gasoline cars. Meanwhile, I can buy a BEV today with blistering acceleration, free fast-charging at a network of stations across the country, and the ability to charge in my garage and start every morning with full range. Hydrogen cars, as far as I can see, are promising none of those things. It's not enough to say that hydrogen is technically "viable". You have to come up with something car buyers want, something they prefer over the available alternatives, and I don't see how that happens with hydrogen.
If I recall correctly, back in the EV1 days, FC vehicles were being developed, and there was even a FC station. So what happened? It seems that when CARB backed off on alternative energy, FC development disappeared. I predict that when again CARB reduces support of alternative energy, FC will disappear, and we would be back to ICE without EVs.
I read somewhere that Prius wasn't profitable until they had been selling them at least a decade. Until then they were basically losing money on each one.
In a way that is true of every totally new car if one factors in design and development and initial advertising. The Prius was a completely new vehicle when it was launched. Other than the low volume Lexus CT 200h that came in the third generation, there was nothing else that shared much with the Prius. The Fiat 500e and the RAV4 EV are different. In their ICE configurations they are both mature, high volume vehicles. However, when the electric drivetrain is added the cost literally doubles. The argument that "economies of scale" will bring the cost of a car down by 50% is not really valid. Even with the current taxpayer subsidies (arguably about $15,000 per car when ZEV credits are counted) these two cars cannot succeed at a break-even level for either manufacturer.

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