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FCA CEO Sergio Marchionne sticks to his guns, still claims EVs can't make money

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On: Wed, Jun 15, 2016 at 12:42PM | By: Carl Malek

FCA CEO Sergio Marchionne sticks to his guns, still claims EVs can't make money

It is no secret that FCA CEO Sergio Marchionne and EV vehicles are like oil and water. The outspoken CEO has been adamant on his opinion that EV vehicles will not be profitable, and he reaffirmed this commitment in a recent interview with Britain's Car Magazine.

In the interview, Marchionne blasted Tesla, calling them "The IPhone of cars" It's important to note that the impact of this metaphor is somewhat mixed considering how much cash the iPhone has generated for Apple since it was first released back in the early 2000s, whereas Tesla has never posted an annual profit from its electric vehicles. However, the core element of that metaphor was clear, and it pretty much states that automakers should stick to what they know and make best, versus branching out into other segments where they do not have as much pedigree and experience in.

When it comes to the development and gradual implementation of autonomous driving technology, Marchionne is actually more in line with other CEOs in saying that there is some potential in the technology, especially on the heels of FCA's newly minted partnership with Google. The main reason for this is that, unlike EVs, the technology and the engineering required to make the car brake, accelerate, and steer on its own is far cheaper than making a vehicle with an electric drivetrain that would offer roughly the same range and performance as a conventional gasoline engine. In the case of FCA, the company has forgone electrification; instead it has focused on a two-part program to implement eight- and nine-speed transmissions and wring out more power and fuel economy from progressively smaller engines, including the 1.4-liter MultiAir turbocharged engine and the 2.4-liter Tigershark II four-cylinder engine. In theory this may seem counterproductive, but so far the initiative has generated results; the strong sales of the Jeep Cherokee and Renegade serve as two prominent examples.

As for the 500e Marchionne can be credited for his accuracy when it comes to predictions with the model selling only in modest numbers despite winning several awards since its introduction in 2013. Marchionne claimed that FCA is making the 500e to comply with green vehicle mandates in California and that FCA actually loses $10,000 for every 500e that is sold to customers in that particular state.


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