While other auto top honchos speak out to persuade consumers to buy their electric vehicle offerings, Sergio Marchionne, chief executive of Fiat Chrysler Automobiles, is telling potential buyers not to buy its Fiat 500e electric car. Why? He told an audience at the Brookings Institution that it costs Fiat $14,000 every time a Fiat 500e is sold.
Marchionne remarked that only Tesla Motors was making money on electric cars, simply because of the higher price point for the Model S sedan. The Italian CEO decried federal and state rules that compel carmakers to produce EVs.
He is referring to the state of California's zero-emission vehicle mandates and the fuel efficiency requirements set by the federal government for 2025 – both of which pushing for production of electric cars.
Marchionne remarked that he will just sell the minimum number of 500e cars possible, and “not one more.” Consider this: the conventional Fiat 500 carries a starting price of nearly $17,300 including delivery, while the 500e has a base tag of $32,650 before federal tax credits.
The difference in price – which should cover the cost -- made consumers unwilling to pay for the electric variant. In the first four months of 2014, Fiat posted a 15-percent drop in sales of the 500 in the US to 11,514 units.
Marchionne said that if Fiat Chrysler would build 500e, it would eventually ask the US government to bail it out for the second time since production of the EVs could make the company bankrupt. Chrysler filed for bankruptcy in 2009 and was bailed out by the US government.
Marchionne remarked that he would prefer the US Department of Energy simply setting fuel efficiency targets while letting carmakers achieve them using their own methods, instead of pushing for EV production.
Marchionne remarked that for Fiat Chrysler to maintain its current US sales mix by 2025, hybrid vehicles would have to account for over half to around three-quarters of sales.