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Fiat Chrysler CEO: Please Don't Buy Our Electric Car 462

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

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  • Raise the Price (Score:5, Informative)

    by Anonymous Coward on Friday May 23, 2014 @06:44PM (#47079485)

    No, they can't. CA Regulations don't allow electric alternatives to be n% more than gas.

  • Re:Raise the Price (Score:5, Informative)

    by NoKaOi ( 1415755 ) on Friday May 23, 2014 @07:00PM (#47079653)

    But it is already expensive enough that it doesn't make a lot of sense to buy if you want to buy one to save money on gas. The price difference is $15350. If we assume $4/gal for gas, then that's 3837.5 gallons. Fiat 500 gas version gets 31mpg city, 40mpg highway. If we average that, then we get 136,231.25 miles before the price difference pays for itself. And that's assuming we paid cash for the car. If you finance it, then add interest on top of that.

    Now, if you want to get the electric version because it's cool and/or you want to support the technology, cool, but realize it's not really saving you money on gas.

    But really, if they have to make at least X cars, and they're not making one more, why is he telling people not buy them? They're still making the exact same number. If some people listen to him and don't buy them, doesn't that just mean they'll sit on the lot longer and sold for even less? If it does help them somehow, could they make the electric version is really horrible colors?

  • You are correct that Chrysler could in theory choose to leave the California market entirely. But in order to sell any cars in states with emissions and fuel economy rules like those of California, an automaker has to sell these compliance cars.
  • Some context (Score:5, Informative)

    by Guspaz ( 556486 ) on Friday May 23, 2014 @07:04PM (#47079691)

    California doesn't regulate the prices of electric vehicles: they require that either 1% of vehicle sales be zero-emission, or that the car manufacturer buy zero-emission credits.

    Nobody is forcing Fiat to build an electric car, and nobody is forcing them to sell that car at a loss. They have decided to sell an electric car at a loss because they believe the loss incurred will be smaller than the cost of the zero-emission credits, and they're selling it at a loss because they don't believe consumers would buy the car unless it's sold below cost.

  • by Steffan ( 126616 ) on Friday May 23, 2014 @07:11PM (#47079771)

    It's a fantastic car. I've had mine for about nine months and after having owned an number of rather expensive (and inexpensive) cars, this is probably my favorite.

    I've never driven a gas-powered Fiat 500, but I imagine the build quality is similar. It's surprisingly comfortable and well built for a car in its price range. I'm pretty particular about the noise levels in my cars and the electric model is reported to have more sound dampening than the standard model; external noise is probably more obvious when there's no engine to mask it. Quiet, fantastic acceleration, and virtually no maintenance. There's a lot to like about this car.

    I hope they continue selling them. I've leased mine since the technology changes quickly enough that I expect better range / faster charging, or both within 3-4 years (plus competition from Tesla in that market segment), but if there were no other option I would definitely purchase mine at the end of the lease.

    This is my first electric car, but I can say unequivocally that I will never purchase another gas-powered car (unless it's an exotic / sports car). It really is that much of an improvement over internal combustion.*

    *For me. Obviously electric cars are not for _everyone_(yet). If you need to haul bales of hay up a mountainside four times a week, buy a truck.

  • Diesel? (Score:5, Informative)

    by iserlohn ( 49556 ) on Friday May 23, 2014 @07:16PM (#47079799) Homepage

    The Fiat 500 has also a very very efficient Diesel mult-jet version, which can do 76 MPG (in UK gallons or 63 MPG US gallons). Unfortunately you can't buy that in the US.

  • by gman003 ( 1693318 ) on Friday May 23, 2014 @07:19PM (#47079827)

    I have a Fiat 500, the non-electric one. For $17,000, it's a good car. But it's clearly a sub-$20K car - and unless they completely redesign major sections of it that are completely unrelated to the propulsion, they aren't going to be getting it to a be worth $30K even with the value of an electric engine.

    Just for one example of what isn't good, the sound system supposedly supports USB. It does, technically, but it does so in the least competent way possible. You would expect it would support folders - like it does for data CDs. It does not. You would expect it to play songs in filename order. It does not. It plays every song on there, in the order of file creation. I noticed in the manual that the entertainment system runs on Windows Phone 7 - I have a very difficult time believing that Windows, in any version, has such broken support for FAT32.

    Another example? The seat belt warning alarm activates even if the car is in park, within a second of turning on the car. I've had to get into the habit of buckling up before even turning the key.

    The Fiat 500 is a cheap car. I'd say an electric version is worth about $25K (I couldn't actually use one myself - I use street parking, so I literally have nowhere to charge it up).

    Tesla got one thing right - because electric cars, for the foreseeable future, are going to add $20K-$30K to the cost of the car, you're better off doing so in high-end cars where that's an extra 10-20%, not double the cost.

  • Re:Indirect tax (Score:4, Informative)

    by Bob9113 ( 14996 ) on Friday May 23, 2014 @07:29PM (#47079921) Homepage

    It would be much more honest to tax them directly instead of letting the auto industry act as an intermediary.

    The reason they don't do that is to leave as much of the implementation as possible in the hands of the free market, while still achieving the electric vehicle roll-out goals. It's pretty much the same thing as CAFE regulations, which mandate the fleet fuel efficiency, but let the car companies decide how to adjust models and prices to achieve the overall average.

    It is an approach that is strongly advocated by free-market-oriented (ie: right wing) policy analysts. The sound-bites against it you hear from the right are not genuine objection to the practice as opposed to other means of achieving the same roll-out goals, they are API calls; programming you to go onto social network sites and bitch about guv'mint regyuh-lashun.

  • Re:Raise the Price (Score:5, Informative)

    by The Grim Reefer ( 1162755 ) on Friday May 23, 2014 @07:36PM (#47079983)

    How is he short sighted? The Republicans have fuck him and his company. They want to put him and all of his employees out on the streets. To their kind, autoworkers are scum that need to starve. That is their world. That is why they are doing this to him. They are forcing him at gunpoint to sell cars at a loss until they go out of business.

    Are you saying that the oil and coal burning/global warming denying republicans are forcing Chrysler to sell electric cars (at a loss) "at gunpoint"? And they're going to hurt the oil and coal industries so they can add the autoworkers to the unemployed?

    Marchionne blamed regulations set in place in California and by President Obama.

    I must have missed when the president switched parties. Obama the Republican. Who knew.

  • Re:Raise the Price (Score:4, Informative)

    by funwithBSD ( 245349 ) on Friday May 23, 2014 @08:01PM (#47080147)

    Not exactly, From Governor Brown's Executive order:

    "By 2020 the costs of zero-emission vehicles will be competitive with conventional combustion vehicles"

    How are they going to do that without cost controls? There is no way it will be that much cheaper to build ZEVs by 2020 that they are cost competitive with gas cars.

    I guess they could tax gas so it is $15 an hour, then it would be competitive over a 100K lifecycle.

  • Re:Indirect tax (Score:4, Informative)

    by AaronW ( 33736 ) on Friday May 23, 2014 @09:43PM (#47080755) Homepage

    Tesla isn't doing it because they decided to go after a different market with a car with a reasonable range. They also have economies of scale. Their batteries should also scale nicely downward since most of the cost is in the 18650 cells.

    Part of Fiat's cost is that they are trying to shoehorn an EV drivetrain into a gasoline powered car. There are a lot of changes possible with an EV as Tesla has shown that can reduce the cost of manufacturing. Designing an EV from the ground up reduces cost. After all, Nissan's Leaf is profitable, though Nissan really needs to address a few major problems (like their lack of active cooling for the batteries).

  • Re:Raise the Price (Score:4, Informative)

    by vriemeister ( 711710 ) on Friday May 23, 2014 @11:43PM (#47081203)
    There is no regulation requiring electric alternatives be less than n% more than gas. There's no way to even enforce it. The Fiat has to be sold for $30k at a loss but the Tesla can go for $80k because the government things its so much nicer? No, Fiat just knows they are competing with the Nissan Leaf and no one would buy their car for 50% more than the Leaf is going for. He just wants to whine and make it sound like the government is ruining him, not that he's being beat in the market.

    And as for that Executive Order, its directed at the California government as a goal to strive towards. You are trying to make it sound like he has passed some sort of law directed at car manufacturers which would be illegal, and impossible as there's no legal definition for "cost competitive". []

    There is no law requiring a Fiat 500e to be sold for less than 200% the price of a regular 500.

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