Was Chrysler Wise to Not Invest in EVs Until Now?

September 11th, 2018 by

Aventura CJDR FCA Electrification Investment

Fiat Chrysler Automobiles (FCA) has a lot on their plate at the moment. With new objectives for FCA to meet, Mike Manley will have to take up the mantle after the late Sergio Marchionne and fill the boots of a giant that saved two automotive companies from bankruptcy. To start, it looks like FCA will be placing a larger focus on hybrids and electric vehicles. But some think it’s too late for FCA to go electric. Jeep® has a five-year plan to make an electric variant of every model in the lineup, but while Marchionne was in charge, he kept hybrid and electric technology at bay, not interested in investing in alternative fuel. Now, many people wonder if it will pay off.

Interestingly enough, many industry observers praise Marchionne for not investing billions of dollars on electric cars that, at the time, were losing money. Even the Fiat 500e was a lost cause for FCA, up for a refresh for 2019/2020. The problem, however, is where many other automakers, like competitors Volkswagen AG and General Motors Co., have garnered attention as a hybrid or electric vehicle brand -, the FCA Group is not known for that. How can an automaker except consumers to trust a brand that isn’t known as an electric-car company to make successful electric vehicles?

Back in January, Marchionne warned that time is running out for automakers to turn to self-driving vehicles and autonomous technology before their cars become strictly used as an alternative to public transportation. It would seem, although against hybrid technology, Marchionne was heavily invested in self-driving vehicles. Chrysler and Google partnered up for the Waymo self-driving car project, now under the Alphabet Inc., name, and have made long strides towards making autonomous cars the norm. In February 2018, the Waymo become the first self-driving ride-hailing service, like Uber or Lyft without a driver, and Alphabet Inc., bought over 60,000 Chrysler Pacifica Hybrid units to continue to expand the fleet.

Did we mention that? The vehicles that make up the Waymo fleet are modified Chrysler Pacifica Hybrid minivans. Inventing a hybrid minivan was the first step Chrysler took to break into plug-in hybrids, and it was successful. Many self-driving startups took notice of the hybrid technology, noting that a spacious minivan with sliding doors is good for shuttling passengers and the battery in a hybrid can help power all the chips and sensors needed to maneuver through busy streets. Waymo was the first, but even small starts up like Voyage, an AV startup that’s running taxi pilots in retirement communities in California and Florida, switched form the hybrid Ford Fusion sedan to the Pacifica plug-in hybrid in early 2018.

Not only does this get Chrysler in the door, but the tens of thousands of purchased units by Waymo will also increase the automaker’s sales and profits. More sales and profits means more money to invest in R&D to design vehicles that won’t fail in the alternative fuel market. Although Marchionne busied himself with corporate spinoffs and Jeep sales to increase profits, he did leave the road map we mentioned above. Fiat Chrysler will be putting hybrid technology into Jeep and Ram vehicles first; they sort of already have with the eTorque mild-hybrid system.

We’ll see if Fiat Chrysler Automobiles has what it takes by 2022. What are your thoughts? Did Chrysler miss its chance, or was the strategy to not invest until now a smart one? Let us know your thoughts on Aventura CJDR social media. And see what the buzz is about with the Chrysler Pacifica Hybrid with a test drive!

Photo Source/Copyright: Bloomberg
Posted in FCA News