Fiat loses $14k on every 500e

Well I know Wards Auto liked the Fiat 500e, since their top 10 engines of the year included the 500e's motor. The Nissan Leaf motor also won a few years ago.

Just for sake of completion, here are others fuel-savers that have won:
Ford 1.0 (first three-cylinder to win)
Honda V6 w/ Variable Cylinders (7 times)
Chevy Volt (2011)
Fusion Hybrid (2010)
Escape Hybrid (2009)
Yukon/Tahoe hybrid (2008)
Accord Hybrid (2005)
Mazda RX-8 (rotary)
Toyota Atkinson engine in the Prius (2010, 2004, 2001)
BMW straight-six diesel

 

He was blowing smoke up listener's butts. To NOT sell ZEV's would cost Fiat/Chrysler WAY more than taking a technical loss on their EV. If Chrysler sells bloated rotten low mileage land barges, then they have to raise their CAFE (corporate average fuel economy) standard. If not ... then EACH land barge they sell gets penalty costs tacked on, tantamount to hundreds per car. So the thing he's really crying about is that he doesn't like being penalized for selling low mileage CAFE crap. At least Mercedes is finally coming around. There was a time they were so arrogant that they simply didn't even care about hundreds getting tacked on per car. Their philosophy was that if you can't afford to buy our cars then you don't deserve one. Funny how poor sales can change corporate thinking.
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None of these carmakers are really in any danger of not meeting CAFE, even if they don't sell the electrics.
Domestic passenger cars:
40.0 Nissan
38.8 Honda
36.3 Ford
36.2 Toyota
35.3 Subaru
33.6 GM
33.3 Volkswagen
32.1 Chrysler
Imported passenger cars:
47.6 Toyota
41.9 Honda
40.0 Mitsubishi
39.5 GM
37.9 Mazda
37.5 Subaru
34.3 Nissan
33.0 VW
32.6 BMW
31.3 Ford
30.2 Daimler
29.9 Volvo

 

If you have read the business articles, you would find that tesla and nissan are selling zev credits for less than fiat says the car is costing them in losses. There obviously is a difference of opinion within fiat.

The same goes for toyota and hyundai. If they fail with their fuel cell cars they likely can buy credits for less than they are losing on the fuel cell vehicles. They did get carb to give them 9 credits each vehicle which means they won't be buying as many credits as the old 7, or the more fair 4 credits.

We don't have disclosure within tesla on how much they sell each credit for, but guestimates have been around $2000 per credit, and prices will likely go down as it and nissan sell more cars this year. A fiat 500e earns 3 credits which would probably cost $6000. GM and honda have been the big buyers of tesla credits, as they both believe in phevs over bevs which earn no credits. Both are selling bevs now also though, and likely are losing lesss than that $6000/car they could buy credits for. If tesla and nissan were making 5000/credit it would be different, and would have much cheaper pricing in california than the rest of the country.

fiat/chrysler also are planning to buy cafe credits from other car companies instead of paying fines to the US government.

Now Mercedes may be the best player of the credit game. They bought a big chunk of tesla and had them co-develop their bev the e-cell. They sold 40% of their stock which likely covers their entire investment and the e-cell R&D costs. They basically get paid to develop bevs, and if they don't sell enough they will buy credits from tesla, and their stock will probably gain more.

 

QUOTE]
We don't have disclosure within tesla on how much they sell each credit for, but guestimates have been around $2000 per credit, and prices will likely go down as it and nissan sell more cars this year. A fiat 500e earns 3 credits which would probably cost $6000. GM and honda have been the big buyers of tesla credits, as they both believe in phevs over bevs which earn no credits. Both are selling bevs now also though, and likely are losing lesss than that $6000/car they could buy credits for. If tesla and nissan were making 5000/credit it would be different, and would have much cheaper pricing in california than the rest of the country.
QUOTE]

From The cold logic behind Elon Musk’s $5 billion gigafactory gamble – Quartz

Last year, each of its S models earned seven zero emissions credits, which sold for $5,000 each, earning Tesla $35,000 in added revenue for each car sold. The price is market-driven, but last year, Tesla earned $131 million from its surplus credits.

 

I don't have the real numbers, but that articles numbers don't add up. Tesla sold apporimately 8400 cars in california in 2013, leaving over 8300 above californias quota. If each earned 7 credits that 58,000 for the tesla S. IF they sold those for $5000 each taht would be $290M instead of the $130M it said was reported. I don't know the exact real number but it should be considerably less than $5000/credit now. With new rules each 85kwh tesla S will earn 4 credits, still a good business if you can sell them for $2K each, but $8k instead of that articles idea of $35k into the future. With nissan selling credits now the prices must be coming down.

 

Those "Credits" are basically Automotive "peas" being shuffled around under the EPA/CARB walnut shells!

 

The CARB walnut shells, if they contain proper goals, transfer money between car makers. This allows growth of technology. Now many don't think the CARB goals are all that good, and that is where the problems come up.

First none of the walnut shells CARB has placed on the table reduce oil usage in the US. That is cafe, monitored by the epa. Now as the california car fleet burns less gas, the epa allows cars in the rest of the country to burn more gas. Its shell game, transfering money from manufacturers that make less efficient cars to ones making more efficient cars should work and make the choice of those SUVs and Trucks more affordable ;-) I'm not sure if that shell game is 100% right either But it does get companies like fiat and mercedes to sign on to higher cafe standards with less complaint.

One thing the CARB strategy should sucessfully do is raise mpg in california and lower it in the rest of the country. Here if the goal is relatively lowering ghg in california for political reasons, it should work. That however does no good for the country

Which leaves us with CARBs job. Carb says zev will lower unhealthy pollutants in the most air polluted state. Indeed if you randomly replaced half the cars in the state with zev cars, and moved the pollution (smoke stacks) to places outside the polluted cities, and you replaced the trucks and busses in those polluted places, you would have less than half the air pollution from transportation in those polluted cities.

Unfortunately the odds of replacing those cars randomly and quickly is unlikely. The average age of cars are around 11 years. That guy driving a 1999 old mustang or tundra isn't likely going to buy that new toyota or hyundai fcv. That guy might trade a luxury car for a tesla, and that helps, but most of those leafs and clarities and toyota fcv will end up coming from people that already own lower polluting cars.

So Toyota and fiat are kind of right in complaining that they don't want to build bevs or buy credits from there competitors. Where toyota is wrong is in saying that no one wants bevs, or you can't make money from them, or that people really want fuel cells.

Hey if CARB gave partial credit for cars that polluted very little like the prius, especially hybrid trucks that emit say 10% of the average new truck, that would be something different. They might be able to clean the air much faster than this ZEV mandate. But it does move money to those companies that are actually building the BEVs, and really toyota makes a huge amount of money in california.

 

A "shell game" is a "shell game" is a "shell game" by ALL names.

 

I would say when a cap and trade scheme is bad, you may call it a shell game, but if it works, you really are getting results for lower costs.

The cap and trade of power plant emissions did quickly and effectively get rid of acid rain at a low cost.

The cap (cafe) and trade of a small number of credits should do better than fines.

Both systems have there flaws. For power plant pollution, grandfathering has set minimum levels for old plants too high. These often require lawsuits to close, and lawsuits are much more expensive than proper regulation. For cafe the biggest complaint was raising standards would hurt competitiveness of american auto companies. By keeping them low 2 of the 3 US autocompanies made poor decissions and were bailed out by the US taxpayer, chrysler for the second time.

These ZEV credit schemes do in some ways represent a shell game, as the value of the credits just changed by CARB's fiat. The regulatory agency needs to actually set up the rules of a mandate well, and fiat has some legitamate complaints. Toyota, well they are gaming the system.

 

it would be interesting if all the car companies got together and stopped selling cars in california. just service them there.

you want to buy a car?

go to a neighboring state and buy one.

 

Ads appearing in the middle of messages are annoying.

California messed-up electricity deregulation by creating an illogical central market (that was actually very regulated & maximum price fixed). So it isn't surprising they are messing with the ZEV and Partial ZEV credits by randomly increasing or decreasing their values. California government doesn't trust the free market to work. The politicians/bureaucrats have to keep messing with it, trying to rig the system for a desire outcome (Russia-style central planning).

"The law created a micromanaged pseudo-market where suppliers have the ability and incentive to manipulate prices to their advantage, and utilities are forbidden from shopping for better prices." Reason Foundation - California: How Not to Deregulate Electricity