Fiat Chrysler Invests on Electrical Models
Soon-to-retire Fiat Chrysler Automobiles (FCA) CEO Sergio Marchionne Friday before last at a presentation of the 2018-22 business plan said the company will invest EUR 9 billion (USD 10.5 billion) to develop and deploy and expand its lineup of electric-powered vehicles, part of an EUR 45 billion (USD 52.4 billion) investment over the next five years.
Marchionne said he expects that by 2025, fewer than half of all the cars sold in Europe will be fully combustion-powered, as gas and diesel give way to hybrid, electric and fuel-cell drivetrains. Fiat Chrysler said it plans to phase out diesel vehicles by 2021 in Europe, to meet increasingly stricter emissions rules.
FCA's EUR 45 billion investment is focused on four core brands: Jeep SUVs, Ram pickups and Alfa Romeo and Maserati luxury cars. Only about 15% of the company's planned EUR 45 billion spending will be used for its combustion engine technology.
Fiat Chrysler Automobiles plans to offer electrified versions across its entire Alfa Romeo, Maserati and Jeep lineups to be launched in the next five years while the truck brand, Ram will have alternative powertrain for high-end premium trucks only. Jeep will stop selling diesel cars in Europe, and introduce four new, fully electric models. Maserati will target Tesla Inc. with a full-electric sports car that reaches more than 186 miles per hour. The head of the luxury line Maserati, Tim Kunsiskis, said the brand aims to compete with Tesla with an all-electric supercar named "Alfieri" that will accelerate from 0-100 kilometers (0-60 miles) an hour in around two seconds. Maserati is entering an exclusive deal with Ferrari for all future powertrains, including hybrid, plug-in hybrid and full-battery electric, while it eliminates diesel engines.
“This plan will provide the portfolio of products aligned with our brands that will ensure our ability to comply in each region,” with stricter emissions and fuel-economy standards, Marchionne said.
By boosting sales of SUVs and trucks while investing in future technologies, such as electric-powered and self-driving cars, Fiat Chrysler hopes to double operating profit to EUR 16 billion (USD 18.6 billion) by 2022 and reach double-digit profit margins.
The automaker also said it is pursuing an aggressive growth agenda globally, led by Jeep which will launch three all-new vehicles, including a subcompact for emerging markets and a reintroduced supersize Grand Wagoneer for the U.S. It will also expand electric engine options to all Jeeps, including four fully electric SUVs.
“All models will have a range of electric options” by 2022, said Mike Manley, head of the Jeep and Ram brands.
Fiat Chrysler plans to downsize its namesake brands, people familiar with the matter said. The company is considering ending sales of Fiat cars in North America and China in the coming years.
Marchionne plans to retire some time next year, but it is believed by insiders that he will stay on in some way to get the 2022 targets off to a good start also stating it would please investors if he stayed on perhaps as Chairman.
Perhaps the biggest question for investors is who will be chosen as the new CEO after Marchionne is gone. Marchionne, one of the longest serving in the auto industry, is leaving at a time of great transition. Chairman Elkann has said the new chief will be chosen among Marchionne’s closest aides. Chief Financial Officer Richard Palmer, Europe head Alfredo Altavilla and Jeep chief Mike Manley are seen as the leading candidates.