$10,000 Loss On Every 500e EV - Fiat Chrysler Boss Marchionne Photo:
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Tim O'Brien | Apr, 26 2013 | 3 Comments

Fiat-Chrysler boss Sergio Marchionne has warned US legislators and governments around the world not to "strong-arm" car makers into electric vehicles "as the only technological solution” to meeting mandated fuel-economy and environmental standards.

Speaking at the Society of Automotive Engineers (SAE) World Congress in Detroit, Mr Marchionne insists that car makers can best chart their own course on powertrain development.

His warning comes on the eve of the Californian launch of the Fiat 500e EV.

Despite positive press about the car, Mr Marchionne says his company has developed the 500e - which has a range of 140km on a single charge - only to comply with Californian law that mandates zero-emissions vehicles as a purchase option for consumers.

He said Fiat-Chrysler will lose US$10,000 on every 500e EV it sells, despite Government subsidies and support, because of the millions it has invested in development costs.

“Doing that on a large scale would be masochism to the extreme,” he is quoted by The Detroit Free Press.

“My fear, which I’ve uttered more than once, is that legislators are rushing precipitously toward embracing (electric vehicles) as the only technological solution,” Mr Marchionne said.

He also predicts that, ten years from now, electric vehicles will account for "well below five percent of the total market", and will not recover the millions spent in development costs of these vehicles.

Mr Marchionne said that “Governments can drive the best possible results by remaining, I insist, technology-neutral”.

Interestingly, given comments from PSA-Peugeot which said on Wednesday it had "begun the execution phase" of an alliance with General Motors, Mr Marchionne in the same address predicted that only “five or six global players” would remain in the industry in the longer term due to pressure to consolidate to cut product development costs.

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