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Sergio Marchionne casts doubt on Tesla, electric vehicle viability

Fiat Chrysler CEO, Sergio Marchionne, is still sceptical about the economic viability of Tesla, and the short-term profitability of production electric vehicles.


Speaking at an event in New York, Marchionne said he was “unconvinced” as to whether Elon Musk would be able to bring Tesla to profit with his current model.

“We still don’t have a viable model for delivering an electric car,” Marchionne told press, as reported by TheStreet. “As much as I like Elon Musk, and he’s a good friend, and actually he’s done a phenomenal job of marketing Tesla, I remain unconvinced of [the] economic viability of the model that he’s pitching.”

“So I think we need to be careful, because when we embrace electrification, and I made comments on the fact we lose money on every Fiat 500, the electric, that we sell in the US,” he continued.

“If I were to do it again, I would certainly reduce the amount of the loss, but I would not make any money. And you can’t run economic entities on losses.”

Indeed, Marchionne has said in the past that he hopes people "don't buy" the electric 500.

Above: Tesla CEO Elon Musk

Rather than banking on pure electric power, Marchionne said Fiat Chrysler would focus on combining electric motors and internal combustion to meet CO2 regulations.

“We are investing without making a lot of noise on electrification,” he said. “We will combine it with combustion to yield the right level of CO2. But we're not betting the bank on going fully electric in the next decade. It won't happen."

This isn’t the first time Marchionne has cast doubt on Tesla’s business model. Speaking to reporters in 2015, he suggested Elon Musk wouldn’t be able to make money on the Model 3, but said he would “copy the formula, add the Italian design flair and get it to the market within 12 months” if the car proved profitable.

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