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Auto suppliers may profit from EV sales even if OEMs don't

Continental's revenue and profit expand amid green-car sales growth.

Fiat Chrysler Automobiles CEO Sergio Marchionne memorably said in 2014 that his company was losing $14,000 on every Fiat 500e electric vehicle it was building. With that in mind, don't invite Mr. Marchionne to any company parties thrown by auto-supplier giant Continental anytime soon. Because Marchionne will likely be a buzzkill.

Continental appears to be boosting profits as companies expand production and sales of electric vehicles and hybrids, Automotive News Europe notes. The company said this week that its 2017 revenue will rise more than six percent to about $45 million.

More tellingly, Continental sales stemming from hybrid and electric-vehicle parts rose 17 percent last year. Sure, research and development costs accounted for 7.3 percent of automobile-related sales last year, up from 6.9 percent in 2015, indicating a possible crimp on profit. Still, with global light-commercial vehicle production expected to rise just one percent this year, Continental appears to be benefitting from more green-car sales.

Fiat Chrysler notwithstanding, automakers that produce both conventional and plug-in vehicles don't break out how much money they're making or – more likely – losing on EV sales. That said, EV maker Tesla Motors had its second-ever profitable quarter during the three months ended September 2016, as the company's net income was $21.9 million, compared with a year-earlier loss of $229.9 million. Third-quarter revenue more than doubled to $2.3 billion. Tesla delivered about 22,200 vehicles in the fourth quarter, while its 2016 delivery total of 76,230 units marked a 51 percent jump from a year earlier.

As for total plug-in sales, Americans last year bought about 130,000 electric vehicles and plug-in hybrids. That marked a 27 percent jump from a year earlier.

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