• Apr 4, 2011
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]


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    • 1 Second Ago
  • 35 Comments
      • 3 Years Ago
      You know Fiat could just have some conversion shop do expensive conversions for $20K each and that would still only be $15K + $20K = $35K. And that would have the same profit per vehicle as the the ICE version since they'd basically be just selling the ICE version.

      This article just show the hatred of EVs of the standard auto-maker. And those that hate EVs and refuse to build them will eventually suffer big time as gasoline starts costing $6+/gallon in a few years.
      • 3 Years Ago
      Love it when the comment system acts like it didn't post your first post. Sorry for the repeat.
      • 3 Years Ago
      Well duh, of course, unless you mass produce anything in this market you won't make a profit.
      • 3 Years Ago
      How is it possible that their break even point is $55k when the ICE version retails for $15k? $15k retail means they're building them for about $12k, subtract all the ICE stuff and they are in to the glider about what, $8k? You are telling me that a battery pack, motor, and supporting electronics are costing them $47k?

      That can't be possible! Those components would cost me half that as a retail buyer doing my own conversion!
        • 3 Years Ago
        Well played, Stew. You've exposed their obvious lie. Even if you subtract the full $15K price of the ICE version from their claimed $55K price you still end up with $40K for batteries and EV components.
        • 3 Years Ago
        If you're not just posing rhetorical questions, read http://en.wikipedia.org/wiki/Total_cost , and realize that when a Fiat executive mouths off he is not revealing its accounting for marginal costs, division between variable and fixed costs, etc.

        In simpler terms, Nissan and Tesla are spending $$$ on EVs to make money. Everyone else is losing money on low volumes for the experience, while waiting for costs to come down.
        • 3 Years Ago
        If it retails for 15k then it doesn't cost 12k to make. It costs a lot less.
      • 3 Years Ago
      Obviously they just need to hire Dan Fredrickson. ;-)

      All kidding aside, I do think they are not doing it properly. Of course, 1-off conversions are money losers. They need to make a real EV, not just a kludge conversion with expensive parts.
        • 3 Years Ago
        Dan Frederiksen is absolutely right. Just do it and stop t(c)rying. GM for example has some great lightweight body concepts. But it's not enough to show them only in sci-fi movies.

        However, since dbm energy's kolibri battery passes all tests at BAM and dekra successful, I'm pretty sure we'll see EV prices significant falling within 3 to 5 years.
      harlanx6
      • 3 Years Ago
      I guess they can make it up in volume. When you are selling a little turd of a car at an exorbitant price, and you have to try to convince your prospective customers they are getting a bargain, it's a tough sell.
      • 3 Years Ago
      Oil is the elephant in the room that these companies still can't, or won't, see. Wake up and get things moving!
        • 3 Years Ago
        Oil is the 4 ton elephant in the government. They want to cut social security, health care, medicare etc... They mention nothing about getting this country off oil, drill baby, drill is all you hear when it comes to oil.
      • 3 Years Ago
      "Consumers not pleased with Fiat and Chrysler's lack of EV offerings, will lose millions on gas guzzlers and unreliable ICEs sitting on car lots as gas prices continue to climb."

      I like this headline better! We will probably see this one in the future :)!
      • 3 Years Ago
      Not that surprising given Chrysler's also has the same attitude (EVs are only useful for parading/PR/NEV credits).

      There's no way you can make a profit off a low volume BEV (esp. done with third parties) without a price of almost $100k; a price on par with a typical high volume ICE definitely isn't possible. You can't even do that with low volume ICE vehicles. That's why Tesla built the Roadster. If Fiat isn't willing to go all in with the 500 EV all they will be doing is losing money.
      • 3 Years Ago
      Sounds like some really poor decisions were made in order to make that car a reality.

      And they will keep the volumes low as the car is probably all part of Chrysler getting CAFE credits in the USA as they are nowhere near meeting CAFE anytime soon.

      So they'll do the typical European/American thing and limit the quantities of the cars, not try to mass produce them to get the cost down.

      Then there's the Nissan approach, where they are actually investing in getting the cost down, by producing them in good quantities.

      Take a bet on the future or drag your heels, because electric is coming. You can go about it the right way, or the totally wrong way...
        • 3 Years Ago
        Nicely said. It seems like they must have hired an external (costly) firm for these conversions, and now they whine about the high cost when they should have been more serious about it.

        Sadly, not all car makers have the vision and long term thinking of Nissan.
        • 3 Years Ago
        Marcopolo, you win :)

        I suppose what disturbs me here is the failed attempts at doing this by not fully committing. If you're not interested and/or capable in doing it, why bother. I suppose the way to game CAFE ( or other foreign fuel/co2 output standards ) may not be to put out a car like this but geez... there has got to be a better way.

        It just looks bad for electric. And ultimately it's very sad that nobody can beat Nissan's price, even using a smaller battery pack, chassis, and motor.
        • 3 Years Ago
        @2WM,

        For an automaker, it's a difficult choice. Despite what the more unrealistic of the EV cheer squad claim, the market for EV's is still relatively small and difficult to make a profit.

        Most major automakers are not very profitable. Toyota, leads in hybrid technology because ,for many years Toyota has been hugely profitable, and very stable. Toyota also wanted to set apart it's luxury brand, Lexus by being different.

        Lexus was expected to lose money for 9 years and it's capitalisation was budgeted and invested on a 9 year plan. Amazingly, Lexus went into profit within 3 years and no longer needed the brand engineering, of the early models. Today Lexus, in particular hybrids, contribute 42% of Toyota's profit!

        William Clay Ford would love to have been able to pursue such a course, but Ford barely survived, and the internecine stock fights and politicking to wrest control out of the hands of the financial institutions and back to his faction of the Ford family, have prevented all but the most cautious of ventures.

        Fiat, is not the Fiat of the Agnelli family, Fiat is also very aware of the bottom line.

        The Leaf is indeed a bold venture, but so is Volt, most automakers will let Nissan/Renault, GM, Tesla, Ford and Toyota, develop the market before committing to a huge gamble, in uncertain times.

        You are right when you say the era of the EV has begun. But not every automaker is financially strong enough to commit to such a risky use of difficult to raise capital, quite yet.



        • 3 Years Ago
        Yeah, 2WM, you're right. It's regrettable that EV's are having such a difficult birth.

        Although, Ford are very committed to funding battery R&D (Including a lot of family money), you'd have to wonder why the major utility companies aren't doing more. After all, they are far more profitable than automakers, and very much stakeholders in the EV evolution.

        The key to the speed of EV adoption is economic energy storage. The major automakers lack sufficient research capital. Too much criticism have been levelled at automakers for past follies, Gas turbines, Hydrogen, LPG, Compressed Air, Electric etc...

        The Automakers are also very aware of the expensive failure of early EV's to gain market acceptance.( $800 million on Vectrix), Look at Blade in Australia, struggling to sell a 4 door sedan EV, 5 years before the Leaf.

        The automakers monitor 'green' EV supporters carefully, and have concluded that the whole movement is very noisy, but largely hypocritical, and this impression only increases the risk and opposition from conservative investment interests within in the automotive industry.

        But fear not, the tide can be delayed, but not turned back!
      • 3 Years Ago
      I suppose its easy to show you are making a loss it is just a matter of what costs get added in - good ol' ABC! (Activity Based Costing).

      It is easy to show a product is not making money (or conversely is making money) - just include R&D costs, attribute more overhead costs into production costs etc.

      It is then how the financial reports are interpreted then as to your viewpoint of the situation.
      • 3 Years Ago
      The alternative fuel vehicles that Fiat is interested in are natural gas. They lead in Europe and in my view may well release models in the US if the Government there goes that way.
      It is difficult to develop two new technologies to mass production at the same time, and Fiat have made a different choice.
      These things are partly dependent on the home market of the automaker involved. Italy has a poor grid, and their easy option is to increase LNG imports, and they have quite lead on building the cars.
      The Germans have very expensive electricity, and no realistic prospects of increasing supply using clean energy since they are anti nuclear and it is an awful place to produce solar or wind, whatever may be the case in the UK.
      Under those circumstances they go for fuel cells, as that way they can use their coal more directly and eliminate some of the worst of the pollution, although not of course the CO2.
        • 3 Years Ago
        I travel through Germany two to three times a year from the very south up to the Baltic
        coast and I can tell you that the Germans have solar every where even in the far north on Feman island factory roofs are covered in panels , in the south whole farms have replaced their barn roofs with panels not just one or two about 60% ! Its all very impressive !
        Here in Northern Italy it is also kicking of big time, many private houses have 5kwh peak systems . But now people are looking towards the larger systems 17 to 20 Kwh peak !
        Also at the moment the car port shading in the majority of the autoroute service stations are being rebuilt using PV panels .

        Fiat are running scared , they are just not allowed by their lord and master ENI to go
        down the electric route , which is a great pity because they are great engineers and if
        they set their minds to it they would I am sure come up with some great low cost BEV's!
        • 3 Years Ago
        Whatever may be the case in Italy, especially southern Italy, in Germany pv installation is lunacy, pure and simple.
        In the depths of the winter the daily output of their solar is from a HIGH of around 6% of nominal capacity to a low of ONE PERCENT.
        This is when electricity demand peaks in Germany, with the solar array producing power which is solar at absurd expense back to the grid during the day in summer, just when it is least needed.
        The solar installations there, built at a cost of around 53bn Euros, have a NEGATIVE net worth to the grid.
        This is because they make the provision of baseload much more difficult, as they have to make way for the solar.
        They also build in fossil fuel burn, as that is the only thing that can fit in around it, whilst increasing it's costs as the plant has to be amortised over fewer hours.

        Solar in Germany is one of the most insane, innumerate endeavours I have seen in my long life.
          Val
          • 1 Year Ago
          Solar panels may not be producing anything in the winter, but wind is producing much more in the winter than PV in the summer. That is why they are COMPLEMENTARY. And peak midday electricity is just when it is most needed in the summer, when air-conditioning is blasting at full power.
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