Loser Deal: Electric 500C Will Cost Fiat $10K Per Sale


Despite carrying a pricetag in excess of $40,000, Fiat CEO Sergio Marchionne insists that Fiat will lose as much as $10,000 for each of the upcoming (2013) electric 500Cs it sells, adding that “the economics of EVs simply don’t work. On the 500 that (Chrysler) will begin selling in the U.S. next year, we will lose over $10,000 (per unit) despite the retail price being three times higher.”

As someone who has owned several Italian cars over the years and paid some dues to Fiat-Lancia Unlimited, I’d like to point out that the economics of Italian cars (electric or otherwise) simply don’t work.  That said, I’m sure Sergio’s using these comments to lobby for more EV tax-credits – time will tell.

Source:  Automotive News, via The Truth About Cars.

About the Author

I’ve been in the auto industry 1997, and write for a number of blogs in the IM network. You can also find me on Twitter, at my Volvo fansite, or chasing my kids around Oak Park, IL.

  • This is why it makes more sense to start EV sales at the top of luxury car and sports car markets first, then sell econo-boxes later.

    This is the market plan for both Tesla and Fisker, because the difference in drivetrain price for cars in the 60K-120K range is a smaller percent of the entire price.

    Let’s say your BEV/REEV drivetrain price is 30K-40K (just for argument’s sake NOT A REAL PRICE). It is much easier for you to compete against a BMW 535i twin turbo engine and sequential 8-speed sport tranny that costs somewhere around 25K-35K, than it is to compete with an econo-box with a 5K-10K cheapo drivetrain.

    Development and volume from luxury and sports car BEV/REEV sales will then work their way down the line to cheaper economy cars over time. This is exactly the model for pretty much ALL new features in cars. Name a feature, and it probably was first found in a luxury car like a Mercedes Benz or BMW first, long before it found it’s way into economy cars.

    • Absolutely. Basic Hayek / Diffusion of innovations stuff here. That said, the Fiat 500 isn’t exactly an econo-box, and it will be bought as a second or third car, much like the Smarts were in 2008/09. An EV like this makes more sense than an all-electric Leaf, I think, which is supposed to play “primary car”.

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