Chrysler, Fiat $10,000 Loss Per Car Gamble with Fiat 500 EV

By Automotive Staff | April 05, 2011
Would you be willing to take a $10,000 loss for every car you sold? Well, Fiat apparently seems willing. According to Automotive News, that’s how much Fiat will lose for every sale of its upcoming 500 electic car, or Fiat 500 EV. 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. via Automotive News (Subscription required) courtesy of Automobile Magazine Staff