The brand’s boss sees the car being an experimental vessel to explore new business models, use cases and forms of ownership.
(Bloomberg) —
This week, Fiat announced something surprising: The Italian auto brand will bring the electric version of its stylish city car back to the US, several years after pulling it off the market.
The return of the Fiat 500e is a bit of a head-scratcher. Americans like super sized, after all, with trucks and sport utility vehicles making up almost 80% of new-car sales last month. The cute little cinquecento might be good for navigating medieval alleyways in Europe, but driving on the highway in one between giant pickups and three-row SUVs can make one feel a little vulnerable.
Olivier Francois, the global head of the Fiat brand, is undaunted. He showed off three concept versions of the electric 500 at the Los Angeles auto show on Thursday, and said the model will make its way back to US showrooms in 2024.
This is just the latest twist in an already fascinating history for Fiat and the 500 in the US. Sergio Marchionne, the larger-than-life CEO who passed away suddenly in 2018, brought the brand and car back to America over a decade ago as part of a deal with then-President Barack Obama.
Marchionne used his master negotiating skills to persuade the Obama administration during the financial crisis to let Fiat take Chrysler out of bankruptcy without having to pay a dime for its initial 20% ownership stake. What Fiat brought to the table were platforms and powertrains for competitive small cars that Chrysler lacked (Obama famously asked why Detroit’s ailing automakers couldn’t make a Corolla.)
The Fiat 500 debuted in 2011 with a splashy ad campaign featuring Jennifer Lopez. The battery-powered version that followed ensured Chrysler could keep selling its lucrative Jeep SUVs and Ram pickups in states led by California that set stricter emissions rules.
Sales never lived up to expectations. The ever-candid Marchionne once lamented he lost as much as $20,000 on each electric 500 he sold and asked consumers not to buy it. He said soon after Fiat returned to the US that it had taken for granted how difficult succeeding in the highly competitive American market would be.
“We thought we were going to show up and just because of the fact people like gelato and pasta, people would buy it,” he said at the Detroit auto show in 2012. “This is nonsense.”
Unlike last time around, the 500e won’t be produced in North America. Stellantis will import it from Fiat’s electric vehicle hub in Turin, Italy.
The car is a success in Europe, ranking as the third best-seller this year through September. It sells for about €22,000 ($22,800) after incentives and offers 150 miles of battery range.
I asked Francois if this was Fiat’s attempt to offer an EV to the masses, something Stellantis CEO Carlos Tavares often says is direly needed.
Francois suggested Fiat is bringing the car back to the US as a sort of guinea pig: an experimental vessel to explore new business models, use cases and forms of ownership.
“The real return on investment of this project is learning, intel,” he told me. “We have nothing to lose and everything to win.”
Although Francois didn’t mention it, the Fiat 500 would work well with Stellantis’ Free2Move, the car-sharing and subscription business it’s been operating since 2016. While other automakers have bailed on car-sharing as a money-losing endeavor, Stellantis has been uniquely bullish, claiming it’s cracked the code to operating profitably.
Car-sharing works best in dense urban centers, which is precisely where Francois plans to market the new 500e. It’s an obvious fit.
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