FCA – A Holdout on Electrification of their Vehicles for Future Models

Time and time again we’ve discussed different automotive companies like FCA. They have stated they will have a large number of electric models on the road in the future. This is coupled with the fact that many countries have already stated they won’t allow the sales of vehicles that have any emissions by a specific year. While many have gone all-in to make sure EV models and zero emissions can become a reality, one company continues to be a holdout when it comes to the electric models that are already part of the market and are being discussed for the future.

The company that continues to hold out against EV models is FCA. Sergio Marchionne, CEO of FCA, has shown admiration for what Tesla has been able to do in a short time. However, He feels the components and support needed for EV models still cause these vehicles to be a losing effort. If you take the example of Tesla, that would certainly feel like the truth. When FCA offered the Fiat 500e for the first time, Marchionne urged customers to stay away from this car. That’s because FCA would lose nearly $14,000 for every one of these models sold.

FCA Moving Toward a Solution

For now, let’s use the Tesla and 500e models as the example. It seems an EV lineup would eventually be a losing effort, but both of these might not be the best examples. Tesla has never been able to produce the number of vehicles that are planned. Especially for the future with the Model 3. As an upstart and new brand in the market, this might not be the best example. There is one takeaway from the Tesla example. That is the fact the company has never turned a profit. They probably won’t until they can learn to produce around 500,000 models per year.
The statement made regarding the Fiat 500e was made when the vehicle first came to the market. This was in 2010. Components are now not as expensive to make. This has lowered the cost of the 500e. Marchionne still says the company would lose money on every one of these models built. With the need to have models that adhere to the future emissions regulations FCA is in a tough spot when it comes to the advancements of their powertrains, but they do have a plan to continue to be able to meet the requirements.
Marchionne has stated FCA will make use of hybrid models to ensure they can meet the regulations that are put in place. This is where he feels the importance of the future will be without offering a fully electric vehicle that would be a financial loss for the company. With other companies going all-in for the electric models, FCA appears to be ready to take a wait and see approach to learn more about how these vehicles can be profitable for the future, which makes perfect sense for FCA and the future that looks bright across the brands and lineups that are offered by this company.