- Apr 4, 2011
Fiat not pleased with electric vehicles; will reportedly lose $10,000 on each 500 EV sold
Chrysler Fiat 500EV – Click above for high-res image gallery
On the sidelines of a general meeting at Fiat S.p.A, Chrysler and Fiat CEO Sergio Marchionne, let slip a few details regarding the Fiat 500 EV. Most notably he said each Fiat 500 EV that the company sells will result in a $10,000 loss. In addition, he said the high per-unit losses exist despite a price tag that's 'three times higher' than the gas-powered Fiat 500. Targeted at $15,500 for the ICE version in the United States, the EV is thrust into $45,000 territory before incentives (ouch).
Perhaps this is why Fiat chairman John Elkann doesn't share the media's affinity for all things electric. One would think that getting attention for something you're trying to sell is usually a good thing, but Elkann feels too much media coverage is centered around EVs despite there being "900 million vehicles with internal combustion engine vehicles in the world and less than 100,000 EVs." Fiat won't be adding many EVs to this number. While a $10,000 loss per vehicle is nothing to sneeze at, overall losses will be small since the EV will only be sold in small volume.
With Nissan CEO Carlos Ghosn saying that the Leaf may be profitable within three years at a starting price of just $32,780 in the U.S., we have to wonder if the Fiat 500 EV is really going down the right path. Selling less of something because you are losing money on each one doesn't sound like the best business approach. That being said, the 500 EV is really a test bed of technology that should help Fiat gain expertise and hopefully sell future electrics at prices that actually profit. Or maybe Fiat's just doing it wrong.
[Source: Automotive News Europe]