Fiat Loses $10,000 on Every 500e

Sergio Marchionne, CEO of Chrysler, announced earlier this week that for every Fiat 500e the company sells, it will lose $10,000. This number was announced during a speech given at the Society of Automotive Engineers World Congress in Detroit. The point: Marchionne was illustrating to the audience that electric vehicles won't be enough for automakers to meet fuel economy regulations. According to the US government, automakers must have a new-vehicle fleet average of 35.5 mpg by 2016, with standards set to rise to 54.5 mpg by 2025. The current average is between 28 and 30 mpg. Electric vehicles, hybrids, and plug-in hybrids help to bring the fleet average closer to the proposed number as well as earn manufacturer credit. "A number of governments around the world including the U.S. have provided incentives for consumers to purchase plug-in electric vehicles and have provided direct incentives to manufacturers. My fear is that regulators are rushing precipitously into embracing electric vehicles as the only technological solution," commented Marchionne at the Congress. Marchionne is urging governments to improve fuel economy through neutral regulations. When the Fiat 500e hits the sale room floors in California this summer, it will be able to travel 87 miles on a single charge and produce 111 horsepower. The starting price is $32,500, with a $7,500 federal tax credit and other incentives attached to the vehicle. This is where the company will lose its $10,000, and Marchionne complains that doing this on a bigger scale "would be masochism to the extreme." To help improve fuel economy in its own vehicles, Chrysler has developed eight- and nine-speed transmissions. These new transmissions will improve fuel economy in its cars and trucks by 30 percent. The company has also developed a Ram pickup that runs on compressed natural gas, another effort to help the overall average. Source: Detroit Free Press
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