Another Car Manufacturer Plans to Electrify its Fleet

After Volvo and Toyota recently announced big plans to electrify their fleets, Fiat Chrysler has come around to the idea as well. Tough rules in Europe and better battery technologies are pushing many auto manufacturers to consider moving their fleets over to electrical power. Chester Dawson writes:

The push into EVs has been hastened by increasingly stringent regulations globally on fuel-economy standards and tailpipe emissions, along with generous government subsidies. That is prompting more auto makers to offer alternatives to gasoline engines.

That trend was highlighted when the U.K. earlier this week said it would ban sales of cars powered by traditional internal-combustion engines altogether by 2040. Earlier this month Sweden’s Volvo, owned by Zhejiang Geely Holding Group Co. of China, said it would only sell partly or wholly electric vehicles by 2019.

Mr. Marchionne’s comments mark a sharp about-face from previous public statements. He has repeatedly questioned consumer demand for EVs, warned they risk turning cars into commodities and lampooned his company’s sole existing EV—the Fiat 500e—as a perennial money loser.

The CEO said battery costs still present a challenge for mass market EVs, but that trouble with diesel-engine technology has made electrification a more attractive path for meeting government-mandated emissions-reduction targets, especially in Europe.

“My aversion to electrification was based on cost issues. What has really made it mandatory is the diesel” problem, Mr. Marchionne said.

Car makers have had to recall millions of diesel-engine powered cars in Europe after they were shown to emit excessive levels of emissions. Volkswagen admitted in 2015 to rigging nearly 11 million diesel engines world-wide to cheat emissions tests and pleaded guilty in 2016 to conspiracy to defraud the U.S. government and U.S. consumers.

FCA has offered an “eco-diesel” engine option on some of its Jeep SUV and Ram pickup trucks in the U.S., but that has come under fire from U.S. regulators who accuse the company of using emissions-defeating technology similar to that deployed by Volkswagen. FCA has denied seeking to intentionally subvert emissions regulations.

Mr. Marchionne said recently that FCA would seek to meet tougher fuel-economy targets by introducing gas-electric hybrid engine versions of most Jeep SUVs, a powertrain configuration already available on its new Pacifica minivan. It is unclear if Maserati cars will be equipped with this type of hybrid solution or fully electric engines.

Without a major breakthrough in standard lithium-ion battery technology, Mr. Marchionne said the global market for EVs is likely to be capped by price increases as demand for batteries exceeds manufacturers’ ability to supply them in large volumes as soon as early next decade.