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Old 22nd May 2014, 11:20   #1
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Default Fiat CEO says "Do not buy Fiat 500e"

i got stumped when i was running though my daily dose of global and local news.

"Sergio Marchionne has a request for potential buyers of the automaker's Fiat 500e electric car: Don't buy it. He's tired of losing money."

At first look, it sounds to be a very negative remark made by the CEO on the new FIAT 500e. But when you look at it carefully, its more like the negative publicity which people & Companies often make.

http://finance.yahoo.com/news/fiat-c...5--sector.html

I have no words to say on this. And i have no info on its specs & capabilities. But i am still wondering what on earth could have possibly made him to make such a statement?
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Old 22nd May 2014, 11:36   #2
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Default Re: Fiat CEO says "Do not buy Fiat 500e"

May be he doesn't want people to buy it because he is losing $14,000 per car as the news says. Is it mandatory for every car manufacturer to sell electric cars in the US?
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Old 22nd May 2014, 12:50   #3
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Default Re: Fiat CEO says "Do not buy Fiat 500e"

Even with a retail price of 32K, Fiat is still losing about 14K on each 500e sold as per that article. I think Sergio is pointing to the fact that 500e is tremendous value for money for the customer at that price point.

I first thought he is spinning the story; maybe he is just being honest. Guess the 500e is built for compliance.
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Old 22nd May 2014, 13:08   #4
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Default Re: Fiat CEO says "Do not buy Fiat 500e"

Sergio is only pointing out the irrationality of the government-mandated dictation of EV-s as the technology to be necessarily adopted by car companies in order to reduce carbon emissions, as is the case in California, which is the only state where the 500e is offered by Fiat Chrysler in the US. He, rightly IMO given America's shale gas revolution, is a votary of natural gas as the best and cheapest way to lower emissions while leaving cars affordable. Introducing taxes on gasoline is the other obviously superior public policy stance. But I guess he has lost the argument, and will at some point in the next few years have to go electric and/or hybrid if FiatChrysler are to meet the US government's emissions and fuel economy mandates.
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Old 22nd May 2014, 13:28   #5
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Default Re: Fiat CEO says "Do not buy Fiat 500e"

Quote:
Originally Posted by yaseenar View Post
May be he doesn't want people to buy it because he is losing $14,000 per car as the news says. Is it mandatory for every car manufacturer to sell electric cars in the US?
I think the decision of selling electric cars has more to do with the government regulations on minimum fuel efficiency for car manufacturers. Once every few years, this limit increases. Even with one electric car in the lineup of a brand, the mean efficiency increases.

Pretty soon, you will even see hybrid or fully electric cars from Maserati and Ferrari
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Old 22nd May 2014, 13:38   #6
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Default Re: Fiat CEO says "Do not buy Fiat 500e"

Issue with the Fully electric cars is that even they rely on Natural resources, which are also not in abundant supply eg: Lithium Ion.
I wonder if everyone starts using E cars, where would it take the prices of the Batteries. They are already expensive, and cars are not the only one's that will be the major users of batteries, unlike Petrol & Diesel. I am not sure about the number of batteries and the power thereon that will be required for running the cars, but what I am sure is that it will be quite a lot.
When the time comes to change the batteries after say 2-3 years, the batteries itself will cost a bomb, even at todays rate. God knows where the costs will reach if people start preferring E Cars.

Hence, according to me, the US has totally lost it on this part of the Emissions mandate. Electric Cars are not a reliable alternative, as even batteries need to be properly disposed off, otherwise they will prove to be more harmful to the environment.

Last edited by vinit.merchant : 22nd May 2014 at 13:41.
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Old 22nd May 2014, 14:35   #7
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Default Re: Fiat CEO says "Do not buy Fiat 500e"

I think U.S and in particular California have forced auto makers to come up with better technologies for both fuel efficiency and safety wise.

There is no reason to be pessimistic about the regulations which eventually will lead to better vehicles as it has already done. I have not seen other car makers complain since the regulations make sure that you dont have to overhaul your line suddenly.
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Old 22nd May 2014, 22:00   #8
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Default Re: Fiat CEO says "Do not buy Fiat 500e"

and the next thing you know dealer are flooded with orders because people now know they are getting a killer deal. Result-> more losses

If he wanted to kill sales, he should've said, 'we are having a lot of issues that we are trying to work out'
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Old 22nd May 2014, 22:26   #9
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Default Re: Fiat CEO says "Do not buy Fiat 500e"

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Originally Posted by Mpower View Post
and the next thing you know dealer are flooded with orders because people now know they are getting a killer deal. Result-> more losses

If he wanted to kill sales, he should've said, 'we are having a lot of issues that we are trying to work out'
Don't think so. A company can deny its product(s) to customers in numerous ways.

In this case, the CEO has mentioned his company will sell only the minimum it is obligated.

I think his statement is taken out of context and blown out of proportion.
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