Electric Cars

As Fiat Hits the Brakes on E-Mobility, a German Entrepreneur Powers Ahead

  • Why it matters

    Why it matters

    Electric cars remain a money losing proposition for most major carmakers, but private initiatives could help pave the way for expanding e-mobility.

  • Facts

    Facts

    • Fiat says it loses $14,000 on each electric car it sells.
    • Germany does not have subsides for electric cars like many other industrial economies.
    • Only an estimated 20,000 out of 60 million vehicles in Germany are electric.
  • Audio

    Audio

  • Pdf

A Fiat 500 converted to electric power by the Hamburg entrepreneur Sirri Karabag. Source: DPA
A Fiat 500 converted to electric power by the Hamburg entrepreneur Sirri Karabag . Source: DPA

 

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.

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Although German carmakers including Volkswagen, Opel, BMW and Mercedes now offer electric models, e-mobility remains an afterthought in the land of the autobahn.

A generous estimate puts the amount of hybrid and fully electric propulsion vehicles currently on German roads at 98,000. But hybrids only really count toward e-mobility efforts if they have plug-in batteries and not ones charged by a smaller gasoline engine. That means there are probably only around 20,000 truly electric vehicles out of a total of 60 million cars in Germany.

Sirri Karabag is a pioneer. In 2008, Fiat first asked him to convert some vans and the Cinquecento to electric power in cooperation with the Italian firm Micro-Vett. Demand was unexpectedly high, encouraging him to start doing the conversions on his own.

As more of his e-cars hit the roads, Mr. Karabag began offering maintenance plans for them. Working with the forklift maker Still, he set up a network of 800 service stations and began actively marketing his conversions.

“With a bigger network of 470 dealers, we’ll be able to greatly expand our volume – also because we’ll become more affordable,” he said, claiming that his dealers make 10 times more from an electric Fiat 500 then a conventional new car.

“Fiat realized there is a successful vendor and technology promoter on the German market.”

Sirri Karabag

Wemag, a municipal renewable power provider from the northeastern German city of Schwerin, in April bought 70 percent of Mr. Karabag’s e-car operations. The new owner recently announced the engineering firm Linde had ordered 200 converted Fiat e-vans. Wemag is also offering a leasing package which includes a Fiat 500, a solar power generator, and 1,000 kilometers worth of juice for €450 per month.

Mr. Karabag now has his sights set beyond Hamburg’s borders, looking to tap the German capital. “Berlin has a special allure, because the government is there and electric mobility gets a lot of attention,” he said. “We are specifically going to target Berlin customers and be very visible in the city.”

Fiat has been conspicuously quite about Mr. Karabag’s ambitious e-car expansion plans.“There is no cooperation,”  a company spokesman said. But if Mr. Karabag is to be believed, the Italian carmaker is interested in more than just having him continue to import commercial vehicles into Germany.

“We are talking with Fiat,” he said. “The company has realized that there’s a successful vendor and technology promoter on the German market who’s done important groundwork.”

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