Chrysler-Fiat Reluctant to Invest in Electric Vehicles Until Next Decade or When Buyers are Willing to “Pay the Cost”

BEVs available natiowide

AUG 7 2013 BY ERIC LOVEDAY 26

It common knowledge by now that Chrysler-Fiat doesn’t show real interest in plug-in vehicles (or even conventional hybrids), but will that change soon?

Lust-worthy?  2011 Dodge Circuit EV

Lust-worthy? 2011 Dodge Circuit EV

Nope, says  Bob Lee, head of Chrysler-Fiat global powertrain.

You see, Fiat is big into diesel and natural gas, not electrification and that’s not likely to change for quite some time.

As Lee told Automotive News, Chrysler-Fiat will focus on adding more diesel options to the North American lineup of vehicles and will turn to engine downsizing and turbocharging for its gassers.

There’s really no mention by Lee of any focus on electrification, though we do know that Chrysler shows some interest in it.

What’s the hold up?  Lee basically says there’s no demand for overpriced electric vehicles.  Or, as Automotive News words it, “Chrysler and Fiat will not invest in electrified powertrains until consumers are willing to step up and pay for the technology.”

And in the words of Lee, “Many customers want to reduce C02, but they aren’t willing to change their lifestyle or pay the cost—yet.”

Lee believes it could be a decade until buyers are willing to “pay the cost.”

We believe buyers have proven they are more than willing to “pay the cost” right now, so we have no clue where Lee is getting his data from.

Perhaps Chrysler is bitter over its failure to bring to market a remarkable electric vehicle, the Dodge Circuit EV, that would have cemented the automaker’s place in the segment.

Source: Automotive News

Categories: Chrysler, Fiat

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26 Comments on "Chrysler-Fiat Reluctant to Invest in Electric Vehicles Until Next Decade or When Buyers are Willing to “Pay the Cost”"

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What a paleo corporate douchebag.

All leading EV models, including Fiat’s own 500e (if we are generous to grant it the adjective “leading”), are right now deep in demand-exceeds-supply territory.

Count to 3 and they’ll come up with another excuse. The real answer is they’re lazy and probably also conservative.

You forget incompetent

correct! Thank you!

Given the fact that the 500e has been getting excellent ratings in driving performance among the compliance EV segment (under 100-mile range), and the fact that the 500e is considered to handle better than the ICE version, I’d say that management is incompetent, but there are some driven engineers in that corporate hellhole somewhere that are better than that.

Maybe Tesla can hire those folks to ramp up development in an environment where they will be appreciated! 😉

Ironically, the Fiat 500e is a pretty decent BEV.

Exactly. Among the compliance/toy/commuter EV segment (from Spark EV to Leaf to Focus EV, etc.), the Fiat 500e has been getting top ratings for driving performance.

In fact, the Smart fortwo ed, the Spark EV and the Fiat 500e are generally rated higher in driving dynamics over their gas counterparts. The Smart fortwo ed represents a huge percentage of all Smart fortwo sales according to a recent article.

I do not recall if that is true of some of the others…I vaguely recall that the Fit EV wasn’t as good as the ICE, but I could be wrong on that.

And, of course, the 500e is already sold out for calendar year 2013, supposedly. If they really cared about making money, they would make more to meet demand, thus spreading out the capex and maximizing their return.

I understand, though disagree, with their reluctance to make EVs. However, since they made one, why not at least meet demand? They aren’t going to be able to kill the movement like GM did last decade. EVs are here to stay now. They cannot afford to back away from doing such a relatively excellent job with the 500e.

I get it that they don’t like investing in an area that won’t produce fast returns. But this is short-sighted. Investment in new product lines is a long and difficult process. If they think they’ll be able to quickly start building EVs when it becomes a profitable market they may be sorely disappointed. They will lack the technology, experience, and intellectual property to build EVs. They’ll be forced to license technology from others.

Toyota lost a lot of money developing the Prius 10 years ago. But it is now the #1 selling car in California and an fast-growing very important market. The same thing will happen with BEVs and PHEVs. And Chrysler will end up the loser.

Absolutely. This short-sightedness is precisely why the Big Three have fallen behind the Japanese time after time since the 1970s, to the verge of bankruptcy a few years ago. And Chrysler has been the worst of the three in recent years.

Why this systemic attitude? I think the Big Three treat their customer base as a captive market and stereotype it as “Middle America”. OTOH, the Japanese need to make cars that sell well in America, Europe, East Asia and the Middle East. So they must be more attuned to what diverse populations actually need, rather than brainwash and program their captive market to ingest what they feel like pushing down their throat.

Given the global sales success of GM and Ford, and looking at their product offerings, I agree with you. They make better, more efficient vehicles for Europe, while we end up with mostly guzzlers. If it wasn’t for CAFE, the Pathetic Three still wouldn’t have a vehicle over 20mpg combined.

All fun and games till they need another bailout.

Yup. Hey Bob Lee; either lead, follow, or STFU. When Chrysler needs another bailout, don’t come crying to us.

Maybe if Fiat kept their word and didnt LIE to the world about the 500e cost then more people would be buying them, $5450 down for a $199 month lease… thats not what their ads say “$999 down $199 month lease, we’ll match the price of the 500 pop” not. That lee guy sounds like a douche

Chrysler head in the sand and rocketing back into bankruptcy.

Famous last words.

This internet nonsense is a passing fad. Libraries is the future and we’ll stick to that.
It always surprises me that such incompetence runs multi billion dollar companies. But they really do. Bob Lutz still to this day thinks that global warming is something Al Gore made up.
But I suppose it’s no worse than electing Bush president of the united states of america 🙂
Twice 🙂
oh say can you see…

Renault-Nissan has sold more than 100k EVs in only 3 years and have trouble fulfilling demand. Tesla is producing cars as fast as they can. But other than that there is NO interest in EVs whatsoever… :rolleyes:

That is quite over-optimistic. EVs are a money-losing venture right now but in the long term they are an inevitable market that every car maker has to prepare for if they want to survive.

Tesla just raised their prices again…all other plug-ins are dropping prices…funny!

I’m just pointing out that there is a market. And manufacturers who go full speed ahead with EVs will be make a lot of money off of them once the market has matured and EVs are a big portion of the market.

Well, call that “we’re crossing our fingers and hoping it either doesn’t succeed or we don’t get shut out of the market”.

EV is all about the batteries. A company could easily get shut out of key cell or battery patents. And then, if the batteries become cheap, the fact that plug-ins both have the economic advantage of grid electricity and provide a very special and highly-regarded driving experience, plus the convenience of home refueling means it’d be much, much harder to compete on starting price.

I hope the article simply deliberately dropped a quote for effect “… but we continue to monitor the technology closely”.

Well, the EV technology has been pushed a bit…in many cases there is a significant MSRP premium for EVs in mass-market segments, despite the lower total cost of ownership, and they don’t even get good range. They are great 2nd cars and city cars, but once that market saturates, then lower-cost batteries will be essential to sustain growth.

Which, of course, enters Tesla. The Model S has no price premium. It already competes favorably in price and performance to other vehicles in its segment, being a full-size, luxury sedan with over 200 miles of range.

The obvious piece of the comment everyone is skipping is about paying the cost.

Sure you can make a Fiat 500e and sell it at a loss. Chrysler doesn’t want to do that. Nissan is the only company claiming to make money today on EVs other than Tesla. The Leaf is the only BEV that isn’t purely a compliance car sold in CARB states again, other than Tesla

Instead of waiting for buyers to pay their high costs for low volume EVs, maybe Fiat should challenge themselves to lower their costs to less than what the market will pay. Higher volume is likely one change they need to make to do so.

GSP

Bob Lutz, formerly a GM exec, once said – “The electrification of the automobile is a forgone conclusion”! Car makers that fail to comprehend this have their heads buried in the sand (or elsewhere) and will miss the boat.

In a previous article, Loveday reported “the rather spectacular Fiat 500e is ‘just the first step’ for Chrysler in the electric vehicle arena.Those are the words of Mike Duhaime, global director of Chrysler’s electrified propulsion and engineering. Duhaime’s past includes being chief engineer of powertrain for the Chevy Volt, so we think he’s capable of more stellar electrified vehicles. Oh, he’s got 33 years of experience under his GM belt too and is 1 year into his Chrysler stint now. But Duhaime does note that ‘There are electric vehicles in our future.’ Duhaime says he took the spot at Chrysler under the promise of getting a chance to develop new electric vehicles, something Chrysler desperately needs.” Obviously, there is a war going on within Chrysler, since they cannot show a unified front regarding Electric vehicles. To Loveday’s article I wrote. Seriously, when Chrysler’s CEO said that they would lose 10k per 500e it was for political reasons. The base 500p sells for 16k. Wholesale is about 14k, Cost of manufacture in volume is about 12k. If you subtract the ICE components, they account for 5k of the total. leaving a 7K fully amortized shell to make electric. To that you… Read more »

“Ford got $5 billion to put a motor and batteries in to the Fusion,”

Ford spent almost nothing on the Fusion EV. GM spent $1B on the Volt, a car designed from the start as an EREV. GM spent $100M just evaluating batteries for the Volt. Ford simply bought their batteries from the same company, what’s good enough for GM is good enough for Ford. Magna developed the motor and controller for the Ford Fusion and sold it to them as a kit to be installed on the assembly line. All Ford had to do was integrate this in to their user interface and change a few controls.

But you are right, they did get a $5B loan, and the result was partly the Fusion EV and more so the C-Max series.

Fiat-Chrysler have obviously decided to let the other companies establish the market and bring down costs by mass production and R&D. Patents by the other companies will run out, and eventually EV batteries will be commodity items. It is most likely that EV batteries will continue to be made by battery companies and not auto companies. I think Nissan will prove to be one of a few exceptions to this. Battery companies will only be too happy to sell batteries to Chrysler-Fiat when they want them.

We here in the EV community may deride Chrysler-Fiat for their choice, but I do not see a compelling reason that their plan should not be successful.