FCA Makes Big Commitment to Electrification

TURIN – Fiat Chrysler Automobiles’ war with the electrification movement is over, as the automaker promises here to invest €9 billion ($10.5 billion) over the next five years on a broad portfolio of products ranging from mild hybrids all the way to full battery electric vehicles.

The plan marks a sharp departure for CEO Sergio Marchionne, who once pleaded with the public not to buy the automaker’s electric Fiat 500 because it lost thousands of dollars on each one.

Part of the push to electrification reflects an acknowledgement that BEVs will be needed to compete in the luxury market in coming years, particularly against the German brands, which already have made huge commitments to electric powertrains for the early 2020s. It also reflects a belief that margins, though not ideal, will be better on premium BEVs than on mass-market models. Overall FCA expects to recover 60% of the cost of electrification.

The FCA plan includes a shift in the Fiat brand toward electrified products that can command higher returns, Marchionne says at the automaker’s Capital Markets Day presentation at its Bolocco proving grounds here.

He points to the Fiat 500 city car, the first to get a new BEV powertrain in 2020, that already commands some of the highest transaction prices in its segment. The 500, Marchionne says, will be ideally positioned to meet likely government efforts to restrict internal-combustion vehicles from operating in some cities.

Marchionne says the movement to electrified powertrains means diesel engines will be phased out from all passenger vehicles by 2021, although they will continued to be offered in commercial vehicles.

Mark Chernoby, chief technical compliance officer, says 12 separate electrification systems are in development or already in production. On the list are three mild-hybrid systems, including the 48V technology already rolling out on the Ram pickup and Jeep Wrangler. Mild hybrids will cover the FCA lineup from small to large front-, rear and 4-wheel drive vehicles.

FCA also will offer one hybrid powertrain for rear and 4-wheel-drive models and four plug-in hybrids, including a performance version (Maserati Alfieri in 2021) and an all-wheel-drive version (Jeep Renegade in 2020).

Four BEV powertrains are on the list as well, including the Fiat 500 city car, a front/all-wheel-drive powertrain for mainstream models, a performance powertrain and a premium unit.

Chernoby says the strategy will be to offer the electrified vehicles with key brand characteristics for which buyers will be willing to pay more. He points to a Wrangler PHEV on the way that delivers “significant low-end torque” aimed at off-roading.

In addition to the Fiat 500, the upcoming Maserati Alfieri will offer a BEV powertrain beginning later in 2020 and the Jeep Grand Commander (new-generation Grand Wagoneer) joins the BEV list in 2021. Maserati’s Quattroporte will offer a BEV powertrain in 2022.

Globally, FCA expects 20% of its fleet be hybrid, PHEV or BEV and 40% mild hybrid by 2022.

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