The late Sergio Marchionne, who was CEO of Fiat Chrysler Automobiles, hated electric cars – to the point that he urged customers to not buy the electric version of the little Fiat 500. That’s because the company lost US$14,000 on the sale of each one.
Let Elon Musk, the founder of Tesla, blow his brains out on electric cars; FCA would resist them, though ever-tighter emission regulations in some regions, such as California, meant the company was forced to launch a few battery models.
Mr. Marchionne’s point was that it was impossible to tell whether electric motors, which use expensive batteries and are hobbled by short driving ranges, or some other technology – maybe fuel cells – would emerge as the winning propulsion system. He was right about that. Today, the market share of electric cars, while rising from insignificant levels, is about 2 per cent. It remains a niche technology largely reserved for the rich.
Yet that hasn’t stopped governments and regulators pretty much everywhere from pushing electrification as if it were the miracle technology we’ve all been waiting for, the cure for urban air pollution and the ideal tool with which to reduce carbon dioxide emissions.
Their electrification push could drive the industry into a dead end, with grave consequences for already struggling automakers. Making cars is a lousy business, always has been.