It’s not every day that a car company executive tries to dissuade people from buying its vehicles. But that’s exactly what Sergio Marchionne, the head of Italy’s Fiat, did when he pleaded with customers to avoid the electric version of its ultra-compact Cinquecento (500).
“I hope you don’t buy it. Every time I sell one, it costs me $14,000,” he complained recently.
Never before had an auto executive so frankly admitted that e-cars are still a losing proposition for most carmakers. Mr. Marchionne has decided to limit his losses by selling only Fiat’s electric vehicles in places such as California, where carmakers are required by law to offer them alongside conventional models. A Fiat 500e on the west coast of the United States costs $31,800 ($23,741), but state and federal subsidies lower the sticker price by up to $14,000.
Yet German fans of the tiny Cinquecento are unlikely to see an electric version anytime soon.
“There’s no business model for a fully electric vehicle right now,” confirmed a Fiat spokesman. “It’s a losing proposition.”
Sirri Karabag, the biggest importer of Fiat vehicles in Germany, begs to disagree. For the past few years, the entrepreneur has been successfully converting conventional Fiat vans and 500s, as well as Volkswagen Beetles, to electric propulsion.
“We make money with electric cars,” Mr. Karabag said, adding that roughly half of the 600 converted vehicles his firm had sold were Fiat 500s. “We’re aiming to sell 20,000 electric vehicles by 2020.”
His success relies on a large portion of improvisation and innovation. At first glance, Mr. Karabag’s electric Fiat 500 looks like a regular gasoline powered car. But under the hood, he’s replaced the combustion engine with a German certified electrical motor with a range of roughly 100 kilometers. The unofficial 500e sells for around €24,000.
Germany offers no green subsidies for electric vehicles. That is one of the main reasons Fiat refuses to sell its own e-cars in Europe’s largest economy.
“You can see how far a producer like Fiat is from mass producing and selling economically reasonable electric cars,” Mr. Karabag said.