Fiat Chrysler Automobiles CEO Sergio Marchionne generally doesn’t avoid speaking his mind. Marchionne did just that Monday when speaking to reporters about the viability of electric cars, which he feels there is no economic viability for such at this time.
Marchionne was speaking with reporters when asked about the subject. He specifically referenced Tesla CEO Elon Musk, calling him a friend, but also stating that the economic model Musk is pushing with Tesla is simply not viable.
“We still don’t have a viable economic model for delivering an electric car,” Marchionne stated as reported by The Street.
Marchionne’s point is not a difficult one to prove. Tesla has burned nearly $10 billion in cash since its founding, yet has never once made a profit. Additionally, Marchionne has stated numerous times that his company’s one Fiat 500e electric car does not make money for FCA either.
The CEO did state that if he were to re-engineer the 500e today it would be cheaper to produce, but FCA would still lose money on it despite the cheaper components.
While the Tesla model may prove to be economically challenging, other legacy automakers apparently feel it will become a viable model over time. General Motors has announced plans for nearly 20 electric models, Ford Motor Company is also accelerating its plans for more electric vehicles. Mercedes-Benz, Volvo and numerous other automakers have also made significant commitments to electrification.
There is one major automaker that has not made a firm electrification commitment: FCA. Perhaps Marchionne will let his successor iron out the details of FCA’s path to electrification. The outspoken CEO is slated to retire from his post at FCA in 2019.