Fiat News: FCA CEO Still Thinks Electric Cars Are Not Viable

[William Maley]

If there is one thing the Fiat Chrysler CEO Sergio Marchionne has been consistent on aside from changing his mind on a number of things is his dislike on electric vehicles.

Speaking to reporters this week at the New York Stock Exchange, Marchionne said there isn't a viable economic model for electric cars.

"We still don't have a viable economic model for delivering an electric car. As much as I like Elon Musk, and he's a good friend and actually he's done a phenomenal job of marketing Telsa, I remain unconvinced of a ... economic viability of the model that he's pitching," said Marchionne.

Marchionne believes the costs for batteries and the various technologies need to come down to make them viable. Otherwise, automakers should focus on developing hybrid and plug-in hybrid powertrains. 

"So how do we find a convergence of technology bringing prices of components down and allows us to price accordingly — or we need to navigate through this process in a combined way between combustion and electrification to yield at least a minimum of economic returns that allows for our continuity? The last thing you want is me to be successful selling cars for 24 months and then go bust. That's not a good story. Especially in a place like this which rewards economic success. Let's not sit here and design our own future in the tank. Let's try and do it properly. We will do all the right things. We are investing without making a lot of noise on electrification. We will combine it with combustion to yield the right level of CO2. But we're not betting the bank on going fully electric in the next decade. It won't happen," said Marchionne.

Source: The Street

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[G. David Felt]

Why am I not surprised by the Emperor with NO Cloths!

Sergio boy could not ever really manage anything right. He sure has not done that as CEO of FCA. 

I wonder how sore his lips must be. 

[surreal1272]

Flunky. Going the way of the horse and buggy is the mind of one Sergio Marchionne. 

[A Horse With No Name]

48 minutes ago, surreal1272 said:

Flunky. Going the way of the horse and buggy is the mind of one Sergio Marchionne. 

So long as it has Italian leather on the seat of that buggy and they sell more than 7 of them in North America Sergio will be happy.

[riviera74]

As much as I would like to make fun of Sergio's comments, he may have a point.  Battery-powered EVs are currently NOT CHEAP enough to make or scale at the moment.  If a battery-powered EV was as cheap as a traditional ICE-powered vehicle, then scale and pricing (let alone profit) would almost resolve themselves.  Right now, a lot of automakers are trying to crack that granite and FCA is not in that game.  Of course, given Sergio's intransigence, it may well be 2030 before an EV will be cheap enough for FCA to make such vehicles.  Then again, will FCA survive until 2030?  They are having a difficult time as it is right now.

[Guest DetroitMuscle]

He is right. BEV does not make sense yet for most. People are straddled with a cord and pay the premium for it. One day perhaps, but not today or in a few years

[G. David Felt]

3 hours ago, Guest DetroitMuscle said:

He is right. BEV does not make sense yet for most. People are straddled with a cord and pay the premium for it. One day perhaps, but not today or in a few years

Every day, more and more find that changing habits does make sense and in the next 18 months we will see a the change gain speed.

@riviera74 I agree with what you said and question if FCA will still be independent let alone have the name brands they have today in 2030.

[ocnblu]

https://www.edmunds.com/about/press/hybrid-and-electric-vehicles-struggle-to-maintain-owner-loyalty-reports-edmundscom.html

 

https://www.forbes.com/sites/stephaniebrinley/2016/04/21/are-ev-and-hybrid-buyers-loyal-to-the-powertrain-ihs-data-suggests-not/#526a255b4669

Edited October 14, 2017 by ocnblu

[balthazar]

This thread is not about the feasibility from the owner's standpoint; Sergio is talking about the economics of manufacturing/selling EVs. I'm no fan of him professionally, but on this point he is correct. From the only numbers I've seen, Chevy loses $9K on each Bolt, FCA loses $20K on each fiat 500 EV, and Tesla lost $750,000,000 last year. From the business model standpoint- as of right now, there is no money to be made.

Unless respective governments want to court bailouts, the countries & states that are considering outright ICE bans would do well to make sure there are manufacturers around to build these cars and at least cover their costs (which would still be a case of no profits/ expansion/ future development).

[G. David Felt]

1 hour ago, balthazar said:

This thread is not about the feasibility from the owner's standpoint; Sergio is talking about the economics of manufacturing/selling EVs. I'm no fan of him professionally, but on this point he is correct. From the only numbers I've seen, Chevy loses $9K on each Bolt, FCA loses $20K on each fiat 500 EV, and Tesla lost $750,000,000 last year. From the business model standpoint- as of right now, there is no money to be made.

Unless respective governments want to court bailouts, the countries & states that are considering outright ICE bans would do well to make sure there are manufacturers around to build these cars and at least cover their costs (which would still be a case of no profits/ expansion/ future development).

Wasn't the ICE auto industry like this in the early 1900's?

[balthazar]

^ What- that early EV CO's were making money & ICE companies were not? No- in no way was that unilateral. There were thousands of companies that failed in the beginning (first 25 years) of the industry, I'm not aware that any 'belly-upped' solely tied to propulsion choice.

[G. David Felt]

45 minutes ago, balthazar said:

^ What- that early EV CO's were making money & ICE companies were not? No- in no way was that unilateral. There were thousands of companies that failed in the beginning (first 25 years) of the industry, I'm not aware that any 'belly-upped' solely tied to propulsion choice.

Agreed, neither EV or ICE made money as to why so many failed. But technology changes and old ideas become new and better.

I agree that ICE is not over yet, but it's days are numbered as better ways to travel come about.

[balthazar]

The OEMs that survived at least some notable period of time (the Depression scorched that industry along with every other one) did make money- my point was it was not related SOLELY to the powerplant.

Look at Doble- built steams cars with AMAZING technology, lasted 1909 to 1931. Again- the Depression, which killed off a disproportionate number of fine marques.

I'm not seeing much of a parallel from the early 20th century to the early 21st here other that the obvious switch from electric to IC. However, the significant contrast with that is; today's US market breakdown is like 94% IC and 6% EV... the early days were never close to that one-sided. Also- the vehicles were largely comparable in what they offered, how it performed & drove. An EV then wasn't any faster (or slower) than a low-end IC car. The 'change over' was relatively fluid & quick and was consumer-driven. Today the market is ridiculously one-sided and most EVs include range numbers that are less than enticing. Plus EVs have already taken longer time to achieve a tiny sliver of the market vs. than the the rise of ICs early on took.

EVs will take off once they achieve 2 critical factors; they're priced competitively with IC competition and offer range numbers comparable to IC mile ranges, with charging stations at least 50% as common as gas stations. It's really only 2 things: range/ charging time/ charger commonality... and vehicle price. Everything else is comparable right now (other than EVs being a thin selection of vehicles so far).

Edited October 17, 2017 by balthazar

[ocnblu]