Fiat expects a $10,000 loss on every 500e sold, CEO Sergio Marchionne says. The announcement was made during a speech at Society of Automotive Engineers World Congress in Detroit, the Detroit Free Press reports. Marchionne thinks that automakers should focus on several alternative fuel technologies to meet upcoming fuel economy regulations.
“For every 500 electric that we produce even after all the subsidies we will lose about $10,000 bucks a car,” he said. “Doing that on a large scale would be masochism to the extreme.”
Current 28 to 30 mpg new car fleet averages will rise to 35.5 mpg by 2016 and again to 54.5 mpg by 2025. Automakers can earn government credits with alternative-fuel vehicles such as hybrids, plug-in hybrids, and EVs. But Marchionne fears that government incentives for electric vehicles will be seen as the best alternative-powertrain solution. He suggests that “technological neutral” regulation should be encouraged.
The Fiat 500e, which will initially be sold only in California, starts at $32,500 before government incentives such as $7500 federal tax credits as well as those offered by California and local governments. With 111-hp and 134-lb-ft of torque, the Fiat 500e is EPA-rated at 122/108 mpge city/highway, with an 87-mile range. For comparison, the larger Ford Focus EV is EPA-rated at 110/95 mpg, with a 76-mile range. For more on the 500e, read our 2013 Fiat 500e First Drive.
Aside from the lower-volume fully electric Fiat 500e, Chrysler is also making fuel-economy improvements with the eight-speed automatic in vehicles such as the Ram 1500, Chrysler 300, and Dodge Charger, and a nine-speed automatic is on the way on the 2014 Jeep Cherokee.
Fiat isn't the only automaker offering a money-losing alternative-powertrain vehicle: the Chevrolet Volt has received criticism as a money loser for GM. Reuters once estimated that the automaker would lose about $49,000 on each Volt sold. GM responded by saying that the news agency only included Volts sold to date and that the lost decreases with each model sold, and that the true number wouldn’t be known until the end of the production cycle.
Source: Detroit Free Press