Sergio Warms up to Electrification, Even As FCA's Light-duty Diesels Get the Green Light

Steph Willems
by Steph Willems
sergio warms up to electrification even as fcas light duty diesels get the green

It’s no secret that hybrids and fully electric vehicles are about as appealing to Fiat Chrysler Automobiles CEO Sergio Marchionne as a crisp, button-up shirt. The FCA boss once famously railed against his company’s sole electric offering — the tiny, money-losing Fiat 500e — for losing $10,000 for every unit sold. Placating California doesn’t come cheap.

Still, Marchionne isn’t alone in distrusting the plug. Subaru and Mazda have shown a similar aversion to electrification, though even those automakers concede it’s a losing battle. In a conference call with investors late last week, Marchionne admitted defeat, outlining a plan to add electric motors to a significant chunk of FCA’s fleet in the coming years. One division stands to go the way of Volvo, with electric motors planned for each new car introduced after 2019.

What prompted the shift in thinking? Diesel, and the public’s growing distrust in compression-ignition engines.

While Marchionne’s plan isn’t yet fleshed out on paper — a five-year plan bows early next year, covering the company’s product timeline through 2022 — the investor’s call counts as an official beginning.

“What makes [electrification] mandatory now is the fate of diesels,” he said, noting the growing crackdown by various regulators on the technology. “We have been reluctant to embrace that avenue until we saw clearer the path forward.”

The Environmental Protection Agency delivered a big wake-up call back in January, denying certification for U.S.-market Jeep Grand Cherokee and Ram 1500 models powered by the 3.0-liter EcoDiesel. A Justice Department lawsuit ensued. Only on Friday did the EPA relent, granting certification to 2017 models equipped with revised emissions software.

It’s not just regulators with fine-toothed combs weighing on Marchionne’s mind. Jurisdictions around the globe have soured on diesels, with several European cities planning a ban of oil burners in the near future. The writing’s on the wall. The company needs to look elsewhere for fuel economy and emissions savings.

Despite the company’s new direction, the same fears persist. One reason Marchionne shied away from electrification in the past was the technology’s high development cost, and he’s still not confident the company won’t get burned.

“If the cost of batteries doesn’t come down, there will be a huge increase in pricing in 2022 and that will cause shrinkage in demand,” Marchionne told investors.

Besides the recently introduced Chrysler Pacifica Hybrid minivan, the next “regular” FCA vehicle destined for the hybrid treatment is the next-generation Jeep Wrangler (though talk of this version seems to have dried up in recent months). Expect plenty more where this came from. While FCA’s five-year plans have proven notoriously variable, Marchionne claims 50 percent of the company’s lineup will feature some form of electrification by 2022.

At Maserati, however, that number should hit 100 percent, and much sooner. The luxury halo brand will adopt electrification on a mass scale, he said, with nearly all of its R&D dollars funneled into electric powertrain development. Whether it’s hybrid variants of existing products, such as the Levante SUV, or all-electric sports cars, like the Alfieri concept car-inspired roadster anticipated for 2020, all Maseratis will boast some measure of electric propulsion in two short years.

It remains to be seen where FCA takes the strategy on the low end of its product range, especially in North America. Lately, the automaker’s biggest investments involve the production of new generations of the Ram 1500 pickup and Wrangler. Profitable and popular, but hardly green vehicles. Assuming stable gas prices, it’s hard to see much demand for low-volume hybrid versions of these utilitarian vehicles.

Global products like Jeep’s Compass, on the other hand, almost scream for a competitive hybrid variant.

[Sources: Wards Auto, Autocar] [Image: Fiat Chrysler Automobiles]

Join the conversation
4 of 21 comments
  • DonInYYC DonInYYC on Jul 31, 2017

    When interviewed at the Hungarian F1 race, he hinted that Maserati would be the electric brand within the FCA stable.

    • 28-Cars-Later 28-Cars-Later on Jul 31, 2017

      Well Alfa Romeo has worked out so well, why not take Maserati to electric? Wait... what do you mean we're out of money?

  • Dmoan Dmoan on Jul 31, 2017

    Maybe he should focus on making reliable vehicles before jumping to more hybrids or EV.

    • Vulpine Vulpine on Jul 31, 2017

      And what makes you think FCA's products are unreliable outside of obsolete personal reputations and biased review magazines? I've found them to be significantly better than their obsolete reputations OR CR and JDPower state. So have many other owners and certain FCA products are among the top sellers in their respective classes.

  • FifaCup Loving both Interior and exterior designs.
  • FifaCup This is not good for the auto industry
  • Jeff S This would be a good commuter vehicle especially for those working in a large metropolitan area. The only thing is that by the time you put airbags, backup cameras, and a few of the other required safety features this car would no longer be simple and the price would be not much cheaper than a subcompact. I like the idea but I doubt a car like this would get marketed in anyplace besides Europe and the 3rd World.
  • ScarecrowRepair That's what I came to say!
  • Inside Looking Out " the plastic reinforced with cotton waste used on select garbage vehicles assembled by the Soviet Union. "Wrong. The car you are talking about was the product German engineering, East German. It's name was Trabant.