We know that, in the long run, electric vehicles are the way to go, but most people aren’t ready to pay for the technology.
Electric vehicle lifecycle costs have been shown to be far less than comparable conventional, and even hybrid-electric vehicles, but the upfront costs can be daunting. In order to foster adoption of the new technology and reduce carbon dioxide emissions, government incentives can knock off thousands of dollars. This makes it somewhat easier for potential buyers to get into electric vehicles, but doesn’t do much for manufacturers.
Due to the economies of scale, electric vehicles are far more expensive to produce than their conventional counterparts. Fiat CEO Sergio Marchionne calls the very idea financial masochism, when the cars cost thousands of dollars more to produce than they sell for. Electric vehicle sales are on the rise though, and technology pricing is coming down, so this could be good news for Fiat and other automakers dabbling in electric vehicles.
If potential clients aren’t willing to pay for electric vehicle technology, then Fiat’s going to look to greener pastures. According to head of global powertrain development Bob Lee, Fiat won’t be investing any more in electric vehicle technology until the attitude of the people changes, which might take another decade, according to him. Instead, Fiat will be putting more emphasis on small turbocharged diesel and gasoline engines, which deliver performance while reducing emissions.
I think Mr. Lee should reconsider. Sure, smaller turbocharged engines might be the cheaper path, but I don’t think he gives enough credit to the thousands of people getting into electric vehicles every month. Still, the Fiat 500e is already out there, and even if they wait a few years to get into more electric vehicle technology, like Subaru taking nearly twenty years to develop their first hybrid vehicle, it’ll be a case of better late than never.