Fiat Will Lose $10,000 For Each 500e Sold image

Fiat CEO Sergio Marchionne said that the automaker will lose $10,000 for each 500 e EV it sells.

Fiat CEO Sergio Marchionne, present at the Society of Automotive Engineers World Congress in Detroit, said that building electric vehicles is not enough for automakers to comply with the government’s ambitious fuel economy standards. The US government set a fuel economy standard of 35.5 miles per gallon by 2016 and 54.5 mpg by 2025, from the current 28 to 30 mpg.

Therefore automakers have begun focusing more on alternative-fuel vehicles such as all-electric vehicles, plug-in hybrids and gas-electric hybrids to reach the imposed fuel economy standards.

“A number of governments around the world including the U.S. have provided incentives for consumers to purchase plug-in electric vehicles and have provided direct incentives to manufacturers,” Marchionne said. “My fear is that regulators are rushing precipitously into embracing electric vehicles as the only technological solution.”

Fiat’s 500e electric vehicle has 111 horsepower under the hood and can travel 87 miles on a single charge. The model will hit the California market this summer at a base price of $32,500. Marchionne said that for each 500 electric vehicle the company will lose about $10,000 per car despite all subsidies, therefore he asks governments to encourage car makers to opt for ‘technology neutral’ regulation.

Chrysler has already turned its attention to the 8- and 9-speed transmissions which improve fuel economy by as much as 30% and has developed the Ram pickups that run on compressed natural gas.

Source: Detroit Free Press