Marchionne Says There’s No Viable Economic Model For Electric Cars

Fiat Chrysler Automobiles chief executive Sergio Marchionne says that there is currently no viable economic model to produce electric cars and make a profit.

Recently speaking to reporters at an event earlier this week, Marchionne used Tesla as an example of how difficult it is to make money while producing electric cars, The Street reports.

“We still don’t have a viable economic model for delivering an electric car.

“As much as I like Elon Musk, and he’s a good friend and actually he’s done a phenomenal job of marketing Tesla, I remain unconvinced of a … economic viability of the model that he’s pitching,” Marchionne said.

The outspoken executive believes that the current high costs of building electric cars means automakers should be focusing on hybrids and wait for the cost of all-electric vehicles to come down.

“How do we find a convergence of technology bringing prices of components down and allows us to price accordingly?” Marchionne pondered during his speech.

“Or we need to navigate through this process in a combined way between combustion and electrification to yield at least a minimum amount of economic returns that allows for our continuity,” he said.

He later corrected reports of FCA losing $20,000 on every Fiat 500e by saying those figures were based on component costs in 2010-2011, not in 2017.

“We’re not betting the bank of going fully electric in the next decade. It won’t happen.”


  • Banesto Highland

    Maybe it’s time to put Marchionne out to pasture.

    • LeStori

      So which car manufacturer actually makes money from producing Electric cars? We all know it is not Tesla…

      • TheBelltower

        They are too busy burning through money… as they build a global infrastructure and prepare to eat Marchionne’s lunch.

        • LeStori

          Maybe but it might be a maggot sandwich. Lithium prices are likely to skyrocket in the next few years. I am betting on it in the share market.

          • exeptor

            Probably new tech not requiring lithium. I can imagine 100 years ago when the gasoline and diesel appears what was the reactions and the inevitable comparison with steam and horse powered machines. No matter how much I like ICEs especially naturally aspired the end is there (sooner or later).

          • TheBelltower

            Lithium values could definitely see a pop. Though Lithium technology is already used in just about every electronic device. Another scenario is that it could plummet once production improvements develop further, or once there’s a certain level of market saturation. Like flatscreen TVs.

          • Six Thousand Times

            Cobalt as well.

    • supermanuel

      That moment came and went 5 years ago.

    • Stephen G

      Agreed! His comments a few years back about industry consolidation struck me odd as he pumped (wasted) money into resurrecting Alfa. Many of these posts make it sound like gasoline is dead, I think that is far from true. I think there is room in the market place for both. As far as the “hard to make money” comment, maybe he doesn’t know that all business is difficult. If making money somewhere was easy we’d all be doing it.

      • Michelin

        Marchionne resurrecting dead Jeep and he try to resurrecting Alfa Romeo. This is his work.
        Musk try developping Tesla, difficult work but we must honor his courage. Both great men.

    • Six_Tymes

      maybe your an azz hat

  • Grasping for Straws

    I’ll take Musk’s crazy over Marchionne’s crazy any time.

    • europeon

      As much as I hate Marchionne, but the difference is that Musk’s “crazy” is backed up by gov’t money.

    • gary4205

      Musk is a con man and a criminal who belongs in prison.

      • HaltestelleLuitpolthafen


        What an intelligent comment.


  • kimbentsen

    FUD – Fear Uncertainty Doubt. Classic Marketing when you can’t beat the competition (Tesla).

    • gary4205

      How is Tesla competition?

      This is a company that consistently fails to meet every production goal, has Soviet era production quality on the crap it does produce, and of course …. has never made a single dime of profit…ever.

      Tesla likely won’t even exist a few years from now.

  • Phoenix

    Hmmm… what’s not profitable are unattractive electric cars. I used to think he was a visionary, and in many ways I still do. However the Leaf 1.0 was hideous, and v2.0, which he said would be attractive, looks old already, makes me think he’s not playing the long game. Neither Leaf even offers superior cargo capacity to rival the eGolf, and they’re hatchbacks! While we are seeing advances with combustion engines such as diesel-tech infused Mazda engines, the scientific discoveries of the next 10, 15, and 30 years will come from advances in battery chemistry. Also, consider the fact that automation, 3D production, and further advances in light-weighting through things like CFRP will likely continue, and it’s feasible that battery energy density will be less of a challenge, while vehicle weight drops and rigidity increases. Combine changes in labor needs through automation and it seems short-sighted to suggest electric vehicles won’t/can’t be profitable.

    • Bob

      Phoenix, please walk me through the link between Marchionne and the Leaf.

      • Knotmyrealname

        I think he has Marchionne and Ghosn mixed up.

        • Phoenix

          Yep, I mixed up the two.

      • Phoenix

        Ugh! Yep, Knotmyrealname is correct – I was thinking of Ghosn as I typed. That said, electric car design, and related marketing seems to undermine their value proposition. In the case of Fiat, the 500e doesn’t really make a statement, and I’ve never even seen an ad for one, and I’m in the Pacific NW.

    • supermanuel


    • Bash

      What are you talking about?

    • Stephen G

      I think we can blame “ugly” on the buying public and Toyota. The Prius proved that buyers wanted to be seen in a car that set them apart from the crowd. As Prius sales grew the Hybrid Civic languished is clear evidence. And don’t be pushing automation, it is what is contributing the most to unemployment today. Nobody’s buying a car if they have no job to get to.


  • Bash

    Come on!, does he lives on mars or what?

  • Six Thousand Times

    He actually isn’t wrong. Electric cars are still a long-term play. Even though Tesla stock is performing well, the company isn’t profitable. I’d be willing to bet GM and Nissan lose money on every Bolt and Leaf they sell. And now, government subsidies are beginning to dry up. I’m sure electric vehicles are still the future but they’re not quite the present.

  • TheBelltower

    “Marchionne used Tesla as an example of how difficult it is to make money while producing electric cars.”

    Yeah right. I’m sure if you’re Marchionne, it’s kind of embarrassing to watch Tesla as they build a car company from the ground up, and prepare to accommodate a paid waiting list of nearly a half-million people. When’s the last time ol’ Serg has achieved anything like this at the company he’s running?

    • supermanuel

      Alternative: “Musk used FCA as an example of how difficult it is to make money while producing anything.”

    • Michelin

      Do you rimember he bought a failed Chrysler that nobody wanted and resurrected it ??
      Renault excaped from American Motors, Daimler excaped and Cerberus failed !!!
      Crazy Marchionne now is targeting two milioni Jeep around the world …..

  • Belthronding Tinuviel

    İ hate Sergio. But what he says about EVs is the truth. Right know EVs are not profitable unfotunately.
    Hybrid is much more useful for the most of the world because only %0.001 of the world can find infrastructure for EVs recently.

  • Charles Lane

    Guy needs to be fired. If you aren’t going to embrace electric cars now or least some time down the road your company is pretty much doomed. For the sake of the employees he needs to be voted out

    • LeStori

      Going to ahybrid is part way to going full electric. Tech is essentially the same. It reduces risk and reduces the chance of you losing money. If Lithium prices spike over the next few years (I am counting on it to make me money) then early adopters may lose more than they bargain.

  • Craig

    Only a fool would make something that they lose $20,000 on every time one is sold.

  • Knotmyrealname

    It’s all about the money, isn’t it.
    Basically, as I read in a very well put together analysis of the current situation, the main automakers have plowed so much money into internal combustion engine infrastructure, that they now don’t seem to be able to find their way (or have the guts to get) out of their own mire. So instead of cutting your losses and cracking on with what is an inevitable way forward, you get people like Marchionne poo-pooing the idea, hoping that others will do similar and put it into the too-hard basket. Well, nice knowing you FCA.

    • LeStori

      Of course it is about the money. Whilst Tesla is a speculative buy on the share market,and shareholders are willing to gamble on a possible future profitability, companies like FCA need to keep their shareholders happy. Plowing money prematurely into a speculative adventure is not what FCAs shareholders would desire. Hence the conservatism. Better for them to move to hybrid whilst preparing for the possible transition to full electric.
      The Chinese are currently trying to corner the market on Lithium. Lithium is also not exactly a commodity that is laying around in abundance. Prices are likely to rise dramatically over the next several years as more EVs are put on the road using current EV tech. If that is the case batteries of the type currently used are likely to become more expensive rather than cheaper. It may be the car companies that are early adopters who are the real losers in that scenario.

      So again yes it is about the money, and how much you are willing to lose on each car before you go bankrupt if it all goes belly up.

      • Knotmyrealname

        Yep, get all that, but how do you think it’ll go belly up? What’s in your crystal ball for the alternative to EV?

        • LeStori

          If battery prices do not continue to come down as manufacturers require in order to be profitable then there will be a drain on resources and as most car companies are on the stock market then there will be some unhappy investors. Hence it is often better to take small steps rather than put all your hopes in a particular technology too quickly. Hybridisation uses traditional tech along with EV tech . Not a large step to full EV. Less risk. Less chance to lose money.

          There are other technologies being worked on. There is no guarantee current EV tech will be the final solution. Unless someone has a time machine, all are guessing.

          • Knotmyrealname

            ..and that’s where Tesla has it wrapped up. No IC infrastructure to concern yourself about, and WRT batteries, you build a gigafactory and pop them out on your own terms. Whilst the competition umms and aars about what to do next.The gap between what Tesla has and what other manufacturers want but don’t have the balls to do is growing exponentially
            But do tell, what else is in the pipeline other than fossil fuel or EV? nuclear, hydrogen, steam, anti-grav? And how is their support infrastructure doing?

  • Miknik

    Whilst the future certainly is electric/Plug in hybrid tec., it is indeed true that so far no electric car actually earns the maker money.

  • autosharero

    I said this before, and I will keep on saying it. This guy is the worst that could happen to the automotive industry. He only works for profit, and if we want to move forward as humanity we need to forget about that. Because of people like him we are where we are. They only want to make money they don’t give a shit about this planet or pollution. I commented on a article a few years ago when he said the exact same thing, and he now is in the same position. He is the Trump of the automotive industry, what a piece of crap of a human.

    • Michelin

      Someone speaks the truth, someothers declare what people want to hear.
      Now electric vehicles have trendy image. Theyr real avantage for environnement is not so shure.

  • JeepersCreepers

    I understand…. Ferrari may make some of the best gasoline powered engines in the world…. to get replaced by something that powers a hairdryer and and blender (aka electric motor).
    Shame about the rest of the stuff FCA makes, perhaps Jeep aside. I quite like Jeeps.

  • Dennis James

    Maybe governments should subsidize auto makers because it is very important to reduce pollution and ensure a clean future for our planet. Maybe subsidising customers is just not enough. Kind of like what is happening in agriculture, where there are significant subisidies for producers.

    • pureworx

      yeah subsidize… waste tax payers money on vehicles that pollute anyway when you take into consideration the requirements or precious metals and the environmental cost of mining these metals to produce the batteries.. which have a limited charge cycle before becoming crap.. never mind the pollution put out during manufacture of the vehicles or the fact that most electric is generated in gas and coal power stations.. the immediate future is hybrid and the long term future will be hydrogen.

    • gary4205

      Not the government’s job.

  • iKaizen

    He is somewhat right. Electric cars are still expensive for what you get. Plus, they would probably sell better if there was more charging stations (at least in my area). As far as the 500e comment, he probably wouldn’t lose as much money if it was based on a better vehicle.

  • Nick099

    There is a slight if hand hoax that is going on when it comes to electrics.
    Electric vehicles, along with solar and wind are subsidized with taxpayer money. That hides their actual costs. They cannot compete to survive without massive taxpayer funding…which of course is the wrong way to go about this.

  • Emmett Lockman

    So the Chrysler division sells a full sized sedan on a 15 yr old platform, and a minivan—that’s it. Dodge’s most important new technology is a 15 yr old pony car with 800+ hp. Any new models they come up with will be SUV’s that cannibalize Jeep sales. They’ve kept Alfa off the US market for 20 yrs — are they reliable enough yet for our market? Any wonder Sergio says the things he says? He’s the Trump of car CEO’s.

  • Auf Wiedersehen

    There was no viable economic model for gas powered cars till there were enough of them made to make one. Look at how few automobiles there were and how rich you had to be to own one, until they were mass produced. This just proves this guy has no idea what he’s doing.

  • Carmelo Van Cabboi

    I think he is right. Only the 2% of the sales are full electric cars. Way better the hybrid cars. +autononomy -petrol +clean -higher costs

  • Six_Tymes

    “Or we need to navigate through this process in a combined way between combustion and electrification to yield at least a minimum amount of economic returns that allows for our continuity,”

    how many here knows what this means? obviously banesto doesn’t.

  • Cupboi

    He kinda has a point, but i get the impression that he’s not that interested in making them profitable. Say what you will about Tesla, but at least they’re trying to develop and simplify the tecnology and making it viable in the long run.

  • Harry_Wild

    No EV manufacturer has made money producing an electric car yet! GM EV1 which was leased back then report that each unit cost them a whooping $120K! Many owner were will to buy it at their cost however and Hollywood actors who own them were willing to double the cost of production to buy it outright from GM.

  • fluffy

    Course he would say that, there’s not enough time for it to make a profit while he lives. why would he purposely help another generation over his own.

  • Blade t

    Sounds like he’s in the oil companies pocket….

    • Michelin

      Wrong, he is in a car company !!!

      • Blade t

        that’s obvious….

  • Cool guy

    The puffin man!


    I’m going to miss the old man when he’s gone…….(not really)

  • He says a lot of stupid things…

  • gary4205

    I hate to agree with this linguine slurping a-hole….but he is 100% correct.

    Not a single company is making a dime selling electric cars.

    Despite hundreds of billions in direct tax payer subsidies to retail buyers, electric cars are wildly expensive and don’t make economic sense in any way.

    There’s a reason why companies stopped making electric cars in the 1920’s.

    This push now is all political. Left wing extremism and dangerous religious extremism from the “global warming” zealots.

    No logical reason for electric cars to exist.

    Want cleaner emmissions? Natural gas is the answer. Always has been.

    • Status

      “dangerous religious extremism”

      That must have been difficult for YOU to type.