Fiat will effectively fund Tesla’s German factory
bloomberg.com
bloomberg.com
While Fiat Chrysler would otherwise struggle to meet new carbon-dioxide emissions standards in Europe, the so-called open-pool option available in the European Union allows automakers to group their fleets together to meet targets.“ Fiat is paying Tesla for emission credits to meet EU regulations.
If Tesla did not sell the right to pollute to the highest bidder, produced Teslas would reduce greenhouse gas emissions. But they do, so every Tesla sold results in a mirror SUV created. Buying a Tesla does not help with climate change. I might as well buy the SUV and let some sucker on the other side of the trade deal with the premium prices, charging hassle, and range anxiety that comes with EV ownership.
What good is a marginally cheaper Tesla if, at the end of day, it doesn’t reduce pollution one bit?
And the reason the emission standard is in place is the EU has decided to force the manufacturers to switch over to producing ev's over the next decade. That is the big story you ought to be paying attention to.
The loans from the Chinese govt...insane...he found literally the only people on earth (perhaps aside from German bankers, although they have lost too much money to carry on for now) that will light fire to huge stacks of cash with no hesitation.
Fiat are shrewd but he clearly had them up against a wall here. Genius.
I would still much rather take my money down to the track rather than invest with Musk but it is genuinely difficult to think of another CEO with as much capital markets hustle.
My concern, though, is that Fiat get to continue making mostly terrible ICE cars thanks to what feels like green washing.
The car itself is quite interesting in my opinion, but the untenable range and lack of accessibility doomed it to unpopularity. If Fiat made a reasonably priced version with at least 200KM of range, and high quality cells, I would make it my next car.
But honestly my experience is good. I mean, it's reasonably cheap, aesthetics tend to be ok at least, engines are decent, and overall it feels like they do a decent job for the price. Not to mention that they have some famous commercial vehicles that Fiat Ducato.
The gasoline owners were less enthusiastic. One of the big problems in San Francisco is that it was the Maserati/Generic Italian dealer that got the FIAT franchise (granted the other Bay Area FIAT dealers are just as bad). They're expensive, incompetent, and not particularly customer oriented. One friend had transmission/clutch issues and the dealer wanted $3000 to R&R the clutch on a car that was barely two years old. The other Bay Area dealers wanted about the same amount of money. I asked someone overseas to look up the book time and parts cost (about 3 hrs and $300 respectively). That works out to well north of $700/hr in labor charges.
The scummy service advisor showed us what he claimed was the clutch they pulled and it looked almost brand new. Turns out FIAT put a hydraulic clutch control system in the American market ones and their Mexican factory put the wrong throw out bearings in early builds. The dealer never did give us the throw out bearing (I wonder why...).
If I wanted an econobox with a warranty that was fun to drive I'd buy a Honda. They've had that market locked down for ages. If I wanted something more exotic I'd look at a VW. If I wanted something difficult to find parts for I'd get a Peugeot or Citroen. If I wanted something that rides like crap and isn't utilitarian I'd get a Miata.
The story only gets worse with Alfa. FIAT couldn't even keep the press cars running and they kept blaming software issues for mechanical failure[0].
FIAT gets a bad rap in the United States because they don't have the cachet to get away with their mediocre quality and non-existent support network.
0: https://www.caranddriver.com/reviews/a23145269/alfa-romeo-gi...
they have no clue on full size cars, and still pay for the socialized handling the Italian car sector was subject into the nineties, but below management they still have good tech and when they put their eggs into the right basket, the output is just phenomenal.
and the Alfa tonale was a thing from unsuspecting times.
But: Fiat made great progress under their late CEO. The current 500 is a modern icon IMO.
Whatever FIAT is importing for the US market hasn't been particularly reliable.
they still have good tech and when they put their eggs into the right basket, the output is just phenomenal.
Speaking of, the one thing that surprised me with the 500 was how primitive its bluetooth support was. I think it will only sync contacts with a phone (playing audio is just not in the cards).
And yes, bluetooth is weirdly primitive. I prefer aux anyway, so no big deal.
I think a Panda excels in Southern European medieval plan cities with its nimbleness, short dimensions, good visibility and just overall practicality. Also looks good. It isn't a sports car or a luxury car and the design accepts that.
In Northern Europe, I would recommend something much more robust than a Fiat.
That sort of confirmation bias has left me wondering on numerous occasions why Fiat is even in business, let alone why it's been able to acquire so many other badges. I'm just aware enough of this that I don't automatically accept statements like "Fiat have made mostly terrible cars". Is that really true? How could they be the third largest manufacturer if that's all they do?
The 500 is fun (to look at, not to drive) but the Tipo, Punto, Panda etc are pretty dreadful.
As to how they got to their position, I’d say that being effectively a flag carrier manufacturer helped sustain them and Chrysler were pretty desperate for a partner after the Daimler split.
Don't worry, this is only temporary. European C02 standards are going to go up every year, so Fiat have to move to electrics as fast as they can.
Regulations goal is to reduce CO2 output. If a private company want to achieve that by funding a foreign electric car company to create a reduced total footprint, that’s their choice.
Ultimately the regulation achieves its goal, reducing CO2. That fact it’s done by increasing competition in the automotive industry can only be seen as an extra win.
So I guess this isn't so much a footgun moment as a whole series of them.
I wouldn't call it a foot gun moment but it does feel somewhat like a faustian bargain.
In this specific case a small foreign company (and Tesla is tiny compared to the likes of VW) gets a leg up. I don’t think it have much impact of EU automotive industry in the long run.
Check the market cap.
Maybe that regulation is stupid and it causes the wrong incentives? If you wanted more electric cars, there are plenty of ways of making them more appealing thus creating a market for them. Like improving charging infrastructure.
Putting a gun to the head of one if not the largest manufacturing industry on the continent is pretty stupid way of doing so.
> That fact it’s done by increasing competition in the automotive industry can only be seen as an extra win.
Yeah great, us europeans will all be thrilled by the increased foreign competition and dead local manufacturers who have EU regulation burdens and foreigners who don't.
Additionally have you seen how small Tesla is compared to someone like VW? They’re easily an order of magnitude smaller.
Finally if Tesla are building in the EU then they’re contributing to the EU manufacturing industry, and they’re beholden to EU regulation.
Well shooting yourself in the foot is a pretty bad way to achieve those goals.
> Additionally have you seen how small Tesla is compared to someone like VW? They’re easily an order of magnitude smaller.
A US company benefiting from much looser regulation at home and most of all the insane FED money printing making its way to the stock market and funding them with free money.
> Finally if Tesla are building in the EU then they’re contributing to the EU manufacturing industry, and they’re beholden to EU regulation.
So we can all be factory workers for americans. Great.
You’re going to have to explain why this is shooting ourselves in the foot. I’m still not seeing it.
> A US company benefiting from much looser regulation at home and most of all the insane FED money printing making its way to the stock market and funding them with free money.
I’m not entirely sure I understand what your trying to say. Which regulations are so much looser and can you explain what advantages they provide to Tesla vs an EU company.
> So we can all be factory workers for americans. Great.
EU companies own factories in the US (VW is a notable example), and US companies own factories in the EU. Nothing wrong with that.
No, the goal is not to reduce CO2, it is to eliminate it entirely, and in order to do that one of the things you have to do is convert all auto transportation over to electric cars. But I bet you already knew that.
Maybe instead of picking a technology you should manage to the target you actually want. The target could in theory be reached with Hydrogen cars and perhaps that would be better — shame if they’d regulated for electric.
(Actually I think hydrogen is an absurd transport fuel, and California’s hydrogen power funding a waste. But the principle holds)
California gave hydrogen funding in order to give them a fair shot. No fair declaring after the fact that it was a waste.
Tesla is also subject to EU regulation. The emission regulations concern cars sold in Europe, no matter whether the company selling them is headquartered in Europe or not. It's just that in this case they're more compliant with the regulation than Fiat.
Does it though?
Instead of Fiat reducing their product's CO2 emissions, isn't it actually the case that they've just done some fancy accounting and now say their emissions are lower because the paperwork now says Tesla is part of their fleet?
Tesla were going to make those cars anyway, so really Tesla gain the free money from Fiat, and Fiat keeps making polluting cars, and we all get to suffer the consequences of no actual reduction of CO2 because ultimately nothing has changed apart from some paperwork that follows the letter of the law rather than the spirit?
Doesn't seem that great to me.
Electric Wrangler/Gladiator with a smaller cross-over version would sell like hot cakes.
this has been changing fast last year, so everyone around Europe is getting their designs off the shelves and into the dealership
have been saying this for years, they aren't competing with Tesla, they aren't going to work with the same low volumes because their margins are completely different, and they are not falling behind, they are acting on traditional business cases, not being startups.
What you've got is a superior off-roading machine. With 4 electric motors you can apply torque with extreme precision. Increasing ground clearance is not an issue since you don't need a drive shaft and diffs.
Great. I look forward to my unemployed well being when the largest EU industry collapses.
For the times they are a-changin'
It may be that this is a valid trade off to make, but it warrants thought at the very least.
Plus it keeps fiat viable while they work on improving their fleet emissions. Nor fiat squanders the opportunity in which it’s a good idea for them to go bust.
If someone builds industry in Europe, in European jurisdiction, which achieves something with less CO2 output, even if he is from Papa Guinea or whatever, what is lost here, beside the ego of some backwards thinking people?