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Chrysler to Lose $10,000 for Every Fiat 500 EV it Sells

Chrysler will begin selling an electric version of the Fiat 500 next year; however, rather than profiting from each model delivered, the automaker will lose nearly $10,000 for every unit it sells.

Under license from Fiat, Chrysler builds the subcompact 500 at its plant in Toluca, Mexico. As it stands, the only form of propulsion available for the 500 is Fiat’s MultiAir 1.4-liter I-4, but starting next year an electric-driven model will join the U.S. lineup. Despite moving forward with the alternative-powertrain, company officials remain skeptical of EV viability in the marketplace.

“The economics of EVs simply don’t work,” Fiat CEO Sergio Marchionne said at the company’s general meeting last week. “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 [than the gasoline-powered version].”

Base model 500s sold here in the United States start around $16,000, which means the electric versions will likely carry a price tag just below $50,000 — or closer to $40,000 with the $7500 federal tax rebate for plug-ins and electrics. The latest news of the 500 EVs price is a vast departure from the figure Marchionne gave when a concept of the model was first unveiled at the 2010 Detroit auto show. At that time, the EV was expected to retail for around $32,000, just double that of a gas-powered model.

Regardless of the higher price and planned losses, Chrysler and Fiat will continue to push forward with the model, which serves as an avenue for it to expand its knowledge on electric powertrains. Chrysler noted its financial impact will be limited as the model is slated for low-volume output. European deliveries of the 500 EV are expected to begin sometime in 2013, with losses consistent with that of the U.S.-bound model.

Expected to retail for some $15,000 more than the Nissan Leaf, do you think Chrysler will have a difficult time selling the 500 EV? Share your thoughts in the comments section below.

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Buying Guide

2012 FIAT 500

Fair Market Price $8,031 Pop Hatchback

0-60 MPH:

10.1 SECS

EPA MPG:

30 City / 38 Hwy

Horse Power:

101 @ 6500

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