CEO doubts Tesla could make a profit out of its new electric vehicle

Fiat Chrysler Automobiles CEO Sergio Marchionne has never been a fan of electric vehicles, but he did say that FCA would be open to building its own compact electric car, provided that it makes good business sense for the company. In a conversation with Automotive News Europe, Marchionne pointed to the Tesla Model 3 as the likely barometer that determines if FCA would jump into the EV bandwagon. If Tesla is successful with the recently introduced Model 3, Marchionne said that FCA would “copy the formula, add the Italian design flair, and get it to the market within 12 months."

But saying so and doing it are two different things and given Marchionne’s well-documented haughtiness towards electric vehicles, it remains to be seen if the FCA CEO will be true to his word. For now, he remains convinced that Tesla won’t make a profit with the Model 3 with its $35,000 price tag. Even the incredibly high number of reservations – now approaching 400,000 pre-orders – for the car wasn’t enough to convince him that Tesla could build and deliver all of them while still make a good profit at the end of the day.

In the event that Tesla does prove him wrong, he won’t have any problem joining the party at a late hour. Just don’t try to convince him that having an EV Ferrari is a good idea. In his own words, “you’d have to shoot me first” before we see an electric Prancing Horse hit the market.

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Why it matters

Sergio Marchionne has never been the type to mince his words, especially when it comes to topics that could potentially dictate the future of the auto industry. His comments to journalists regarding Fiat Chrysler Automotive’s stand on electric vehicles perfectly illustrates his nature to be unfiltered and off-the-cuff. It’s one of his endearing traits, but it’s also gotten him in trouble in the past.

I don’t doubt his intentions here nor do I doubt his long-held skepticism of electric vehicles. He did after all see the Fiat 500e, an electric version of the 500, end up being a losing investment for FCA. So he has some experience in that regard. But his comments about copying Tesla’s formula if the Model 3 is a sales hit goes to show that no matter what someone thinks, customers still dictate the direction of the auto industry. If Tesla is as successful with the Model 3 as I expect it to be, I believe Marchionne when he said that FCA will be quick to follow in those footsteps. But right now, it’s in a wait-and-see mode to see if the American EV maker can live up to the enormous number of pre-orders it has received for the Model 3.

Marchionne is smart to see how the market receives the Model 3 before he commits a similar model for FCA. I can’t blame him for taking that approach because it’s the smart way to go about his business.

Tesla Model 3

2018 Tesla Model 3 High Resolution Exterior
- image 671346

Read our full review on the Tesla Model 3 here.

Source: Automotive News

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