TURIN – Chrysler Group LLC will lose more than $10,000 on every battery-powered Fiat 500 its sells, Fiat-Chrysler CEO Sergio Marchionne says. That heavy financial hit won't stop the automaker from launching the Chrysler-built electric version of the minicar in the United States in 2012, underlining the pressure automakers face to improve fuel economy and remain competitive in the race to offer alternative powertrains.
"The economics of EVs simply don't work. 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 a version of minicar with an internal combustion engine, Marchionne said on the sidelines of Fiat S.p.A.'s general meeting on Wednesday.
Marchionne said that Fiat would lose a similar amount on the Fiat 500 EVs it will get from Chrysler's Mexico plant once the Italian company starts the car's European sales, likely in 2013. Chrysler has a license from Fiat to build the fuel- and battery-powered versions of the 500, which means the U.S. automaker gets all the profits – or losses – from North American sales of the cars. Fiat has a 25 percent stake in Chrysler.
Chrysler unveiled a concept of the 500 BEV (short for battery electric vehicle) at the Detroit auto show in January 2010. The gasoline-powered 500 starts at $15,500 in United States, which means the electric version would cost more than $45,000, based on Marchionne's comments.
When a near-production concept the Fiat 500 EV was unveiled last year, Marchionne said the production model would start at $32,000, with the batteries accounting for half of the minicar's cost.
Low volume, possible benefits
Although the per-unit loss is high, the automaker's total financial hit should be minimal because Fiat-Chrysler, without being more specific, said it would produce a low volume of the electric 500.