Sergio Marchionne Wants to Build a Tesla Model 3 - Dodge Nitro Forum
Chrysler/Dodge/Jeep News Find out the latest scoop here!

 
LinkBack Thread Tools Display Modes
post #1 of 2 (permalink) Old 04-18-2016, 03:28 PM Thread Starter
Super Moderator
 
rickaren's Avatar
 
Join Date: Nov 2006
Location: Indiana
Posts: 22,861
Garage
Sergio Marchionne Wants to Build a Tesla Model 3

Sergio Marchionne Wants to Build a Tesla Model 3 With "Italian Design Flair"

If Tesla can actually make a profit on the Model 3, Sergio says he'll totally clone it.



Unlike many prominent CEOs, Fiat Chrysler boss and crew-neck sweater enthusiast Sergio Marchionne says whatever the hell he wants. Typically it's very entertaining, and his recent comments about the just-revealed Tesla Model 3 are no exception.

Quote:
Marchionne spoke to Automotive News Europe at an FCA meeting in Amsterdam Friday. It turns out, he's not all that enamored with the Model 3.

"I am not surprised by the high number of reservations but you have then to build and deliver them and also be profitable," said Marchionne, perhaps hinting at Telsa's history of production delays: Tesla Model X production was repeatedly postponed almost two years from Tesla CEO Elon Musk's original 2013 target.

Marchionne says he doesn't think Tesla will make a profit on the Model 3 at its expected $35,000 base price. Or at least, he's very interested in finding out how Tesla plans to make money on the car. As he told Automotive News, if Musk "can show me that the car will be profitable at that price, I will copy the formula, add the Italian design flair and get it to the market within 12 months."

A $35,000 electric car with Alfa Romeo Giulia styling? We'd be into that.

Fiat Chrysler has been criticized for its blasé attitude toward electric and hybrid vehicles. Up until the debut of the new Pacifica minivan (with plug-in hybrid option), the only hybrid FCA offered was the $1.3 million, 949-horsepower LaFerrari. Currently, the only all-electric car in the automaker's portfolio is the Fiat 500E, a car Marchionne openly encourages people not to buy.

Marchionne doesn't seem worried by FCA's late-to-the-game strategy, telling Automotive News, "better late than sorry."

SOURCE

Rick

Nitro Year: 2007 (1 of 91,815 sold in 07)
Nitro Model: R/T 4X4 Stone White
CAT-BACK Exhaust, CAI, Projector Head Lamps
Fully-Equipped w/all factory options
rickaren is offline  
Sponsored Links
Advertisement
 
post #2 of 2 (permalink) Old 04-18-2016, 03:36 PM Thread Starter
Super Moderator
 
rickaren's Avatar
 
Join Date: Nov 2006
Location: Indiana
Posts: 22,861
Garage
Victim of Disruption

Fiat Chrysler Is a Textbook Victim of Disruption
If Fiat Chrysler waits until it can make EVs profitably, it'll be dead in the water.




Tesla Motors may not technically fall into the textbook definition of a "disruptive" company primarily because of its unique top-down approach, but at the same time you can't deny the fact that EV adoption is starting to affect the broader industry in a way that signals the beginning of the end for the internal combustion engine (ICE). To be clear, it will take many decades for ICE vehicles to die out (maybe even a century for ICE to fade completely).

Quote:
Most automakers now recognize this. Most automakers are doing the best they can to prepare, investing heavily in developing EVs that can accommodate expected future demand. Fiat Chrysler (NYSE:FCAU) is not.

Stuck in his ways
For a guy that has long lamented the state of the auto industry, CEO Sergio Marchionne is surprisingly averse to change. Marchionne is also very much a victim of the precise type of thinking that leads to the downfall of great companies (not that Fiat Chrysler is particularly great among the major automakers). Specifically, when massive technological shifts are on the horizon, the absolute worst thing that any company can do is stubbornly adhere to traditional resource-allocation methodologies.

Generally speaking, no new technology is ever profitable from the get-go, and that's exponentially true when it comes to the auto industry since design and development cycles cost billions of dollars and many years. Over the years, Marchionne has demonstrated an entrenched disdain toward EVs which will eventually come back to hurt the very shareholders he's trying to protect.

Stop me if you've heard this one before
For example, as recently as 2013 Fiat Chrysler said that it wouldn't invest heavily (beyond compliance vehicles) in EV development until consumers showed a willingness to pay up for the premium. The very next year, Machionne even went as far as to ask customers not to buy its Fiat 500e EV, specifically because the company was losing about $14,000 per unit at the time on the compliance car. The CEO made it clear that he only wanted to sell the absolute minimum necessary to meet regulations.

In a recent interview with Bloomberg, Marchionne said, "I can't make money building a car like Tesla. So for the time being I am abstaining." Responding to Tesla's strong Model 3 unveiling, Machionne again emphasized the bottom line: "I'm am not surprised by the high number of reservations but you have then to build and deliver them and also be profitable." The executive continued that if Tesla CEO Elon Musk can demonstrate "that the car will be profitable at that price, I will copy the formula, add the Italian design flair, and get it to the market within 12 months."

Everybody's doing it
Do you want to know who else loses money on EVs? Everyone.

Literally every automaker in the world today loses money on EVs, including all-electric OEMs like Tesla as well as industry titans like General Motors (NYSE:GM). But it's precisely this type of short-term thinking that delayed the EV movement by a decade in the first place. General Motors famously killed the first EV1 since it lost tons of money developing the vehicle only in order to meet California mandates.

As soon as General Motors successfully lobbied to get the mandate killed, it recalled all the leased EV1s and killed them, too. Former GM CEO Rick Waggoner has since admitted that shuttering the EV1 program was the worst mistake he made.

It's precisely this type of short-term thinking that delays any technological progression, since all new technologies are incredibly expensive to develop and bring to market. But the value that those technologies inevitably deliver to society far outweighs the upfront costs over time. Most automakers are finally coming to terms with this, and now investing heavily in EV or hydrogen fuel cell development despite the fact that those endeavors will inevitably be unprofitable for many years initially.

It's going to be a while until Tesla is profitable on a GAAP basis, and if Fiat Chrysler waits until then, it'll be dead in the water: Every other automaker will have already hopped on the EV bandwagon.
SOURCE

Rick

Nitro Year: 2007 (1 of 91,815 sold in 07)
Nitro Model: R/T 4X4 Stone White
CAT-BACK Exhaust, CAI, Projector Head Lamps
Fully-Equipped w/all factory options
rickaren is offline  
Sponsored Links
Advertisement
 
Reply

  Dodge Nitro Forum > Dodge Nitro News & Polls > Chrysler/Dodge/Jeep News

Quick Reply
Message:
Options

Register Now



In order to be able to post messages on the Dodge Nitro Forum forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.

User Name:
Password
Please enter a password for your user account. Note that passwords are case-sensitive.

Password:


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:
OR

Log-in











Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page
Display Modes
Linear Mode Linear Mode



Similar Threads
Thread Thread Starter Forum Replies Last Post
Tesla Model S for Kids by Radio Flyer rickaren Off-Topic Discussion 1 02-19-2016 05:27 AM
Sergio Marchionne at the 2016 NAIAS: rickaren Chrysler/Dodge/Jeep News 0 01-11-2016 08:34 PM
Sergio Marchionne on a partnership between FCA and GM: rickaren Chrysler/Dodge/Jeep News 0 08-31-2015 05:47 AM
Sergio Marchionne is now Chrysler chairman rickaren Chrysler/Dodge/Jeep News 0 09-08-2011 01:37 PM
Speech by Sergio Marchionne (long) rickaren Chrysler/Dodge/Jeep News 0 06-04-2010 05:53 AM

Posting Rules  
You may not post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

 
For the best viewing experience please update your browser to Google Chrome