Fiat Chrysler CEO: Please Don't Buy Our Electric Car

schwit1 (797399) writes "The CEO of Fiat Chrysler said he hopes that people don't buy his company's electric car, the Fiat 500e, which he is forced to sell at a loss because of state and federal mandates. 'I hope you don't buy it because every time I sell one it costs me $14,000,' Sergio Marchionne told the audience at the Brookings Institute during a discussion of the auto bailout. 'I'm honest enough to tell you that I will make the car, I'll make it available which is my requirement but I will sell the limit of what I need to sell and not one more,' said Marchionne. Fiat Chrysler produces two Fiat 500s. The gas-powered Fiat 500 has a base price of $17,300. The electric Fiat 500e runs $32,650. In his candid remarks, Marchionne blamed regulations set in place in California and by President Obama." (Also at USA Today.) If they find they're selling too many for comfort, couldn't they raise the price?

Comments

I blame bad design

[rsilvergun]

Toyota & Honda, heck even GM, can all make zero emission cars. I do like what California did though. They set _sales_ qoutas_ instead of manufacturing qoutas, so they companies couldn't weasel out of getting real zero emission cars on the road. It's rare to see regulations that have teeth in them. I suppose with the amount of Smog California has (insert South Park Smug jokes here) that's pretty important though. But I wish Arizona would do it. We have days when you're not suppose to go outside because the smog is so bad...

Fixed costs & whining

[sjbe]

So, we are to believe that the electric variant costs $46,650. I can only believe that must include a huge amount for the sunk costs - designing the electric car, rather than each electric car being $30k more expensive than the gas equivalent.

(Disclosure - I am a cost accountant)

Wouldn't be surprising actually. The powertrain is completely different than the gas powered car and there are non-trivial engineering, tooling, and other fixed production costs that have to be amortized across lots of units if you are going to sell at a relatively low price. Plus I imagine the powertrain is not produced in big enough volumes to realize real economies of scale so the unit costs I would expect to be fairly high. Given the state of the art in electric vehicles I really don't see an electric vehicle being significantly profitable at less than $50,000 right now. There simply aren't enough of them out there to drive the unit costs down. I expect that number to fall over time but it will require investment by companies and maybe some government subsidies here and there.

On the other hand, enough with the whining and make a car that is worth what it costs to manufacture. Tesla makes a genuinely good car and sells it for a price that should bring a profit (eventually). The Fiat 500e is rather pathetic by comparison. It's a little runabout with a short range rather than a serious attempt to build an electric car. Regulations are not to blame for their inability to make a profit with an electric car. Their lack of engineering prowess and lack of commitment to the technology is why they are where they are.

Tragedy of the commons

[GWBasic]

Sadly, environmental issues, and limited resources, isn't something that the free market will handle when left to its own devices. I have no sympathy for automakers that need to be dragged kicking and screaming into the 21st century.

Now I want to buy an electric Fiat out of spite!

Re:He'll have his work cut out for him

[dreold]

Fellow 500e owner here. Seconded your opinion in all points.

As I wrote in another comment in this thread, I actually did the math, and based on my driving needs cost-wise the 500e is a net savings (including cost of the car) for me (compared to the car I was driving when I decided on the 500e) over five years.

Plus, it is fun to drive. This is subjective, of course.

It's clearly not for everyone and every situation, and even though Fiat offers free rentals at major agencies for those longer trips, I am glad that we have a second (ICE) car in the family.

Re:Raise the Price

[Rei]

Is your boss's Prius's battery covered in gold trim and studded with tiffany diamonds and signed by George Clooney or something? Because brand-new OEM Prius batteries cost $2.5 to 3.5k and you can get refurbished ones for under $1k. Some companies that specialize in refurbished packs charge less than $1k *total* (including labor) to swap out a Prius pack with a refurbished one.

$10k? If that's true, either your boss was pulling your leg or he was scammed, big-time.