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EV sales - true losses or investment in the future?

This has long been the standard in states like California where because of various clean air regulations - car manufacturers must PAY TO PLAY . . .

California rules apply to automakers that sell at least 60,000 vehicles a year in the state, which means the Detroit makers, plus Toyota, Honda and Nissan.

These "Compliance Cars" as they are sometimes called don't include Hybrids, CNG cars and clean-burning gas engines as they can't deliver the same immediate air quality/climate-change goals like an EV.

Although adding to the EV compliance numbers, the Nissan Leaf and Tesla Model S are unique among this group by virtue of being promoted nationwide with the goal of commercial success.

With a likely target of limiting their losses or not making a profit, car makers continue to lose significant money from each EV sale as they offer huge discounts and lease subsidies.

Early EV adopters are not only entering a Brave New AUTOMOTIVE World but they are also subsidizing the automakers EV Beta Testing . . .

Automakers hawk electric 'compliance cars' to meet rules
 

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Call me crazy, but I like Marchionne. The guy's transparent about everything. He basically just told everyone not to buy a 500E! :D
 

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Call me crazy, but I like Marchionne. The guy's transparent about everything. He basically just told everyone not to buy a 500E! :D
To me it sounded more like "Buy it, it's the best deal you can get!"

MB DNA: While true for the smart (and this is the main reason MB absorbed MCC), I don't think the Fiat counts as a compliance car. Fiat isn't selling any big guzzlers in the US, are they?
 

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MB DNA: While true for the smart (and this is the main reason MB absorbed MCC), I don't think the Fiat counts as a compliance car. Fiat isn't selling any big guzzlers in the US, are they?
Follow the money trail - who owns CHRYSLER?

Fiat doesn't take a $14K hit on every EV sale for S & G and there is a reason that most every Fiat studio is next door to a CHRYSLER dealer - with those big RAM trucks and SUVs, CHRYSLER needs some compliance help.

http://www.usatoday.com/story/money/cars/driveon/2014/01/21/done-deal-fiat-now-owns-all-of-chrysler/4718529/?siteID=je6NUbpObpQ-EM_kTZZI.8ed8.JYoGNpoQ
 

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To me it sounded more like "Buy it, it's the best deal you can get!"

MB DNA: While true for the smart (and this is the main reason MB absorbed MCC), I don't think the Fiat counts as a compliance car. Fiat isn't selling any big guzzlers in the US, are they?
Nah, you have to watch/read press statements by Marchionne. There are no blanket or Reverse Psychology type statements with this guy.

He's seriously saying don't buy the 500e. He makes statements like that all the time. I like it, he doesn't try selling BS.

The 500e was a development disaster and there's no possible way Fiat will ever profit from selling them. As it is, they're more expensive than comparable EVs. If they sold them at cost, they wouldn't sell any. So they have to deep discount and sell at a loss. Kinda like smart before the 451 came around.

My guess is that Marchionne is figuring that it's cheaper not to build any 500e cars at all than to keep building them at an even further loss. :)

And it really shouldn't come as a surprise. The only reason the 500e exists is so FCA can meet EV requirements.

The same goes for the Scion iQ EV as well. It was such a flop that Toyota wishes you never mention it ever again.
 

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Unless you sell them for $70K plus. We know why Tesla tackled the high end first - so they could actually turn a profit per car... :)
They did in my case. I would never have considered buying a Mercedes if it wasn't for the fact I walked into a Smart dealer to test drive the Smart ED and my wife sat in a loaded GLK and declared "if you get one, I get one".

Deal!

So MB made out with $80K, of that $25K was the Smart ED (some of which the Ontario rebate paid on my behalf up front, thanks, I'll pay you back with my electricity usage for the rest of my life!).

The bigger picture here is that Mercedes gets a goodly number of customers driving electrically powered cars which they will use as a marketing tool, especially when they start shipping a luxury electric SUV/sedan to compete with Tesla.

Then again, I may just buy a Tesla because I want to support a first mover in this EV space, just like I did with Mercedes/Smart.
 
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