Fiat will effectively fund Tesla’s German factory

https://www.bloomberg.com/news/articles/2020-01-09/fiat-will-effectively-fund-tesla-s-german-factory-baird-says

by ryzvonusef • 7 years ago

40 89 7 years ago

https://web.archive.org/web/20200110194339/https://www.bloom...

rapsey6• 7 years ago

EU laws forcing an EU car maker to fund their (foreign) competition. Classic foot gun moment as a result of over regulation.

avianlyric5• 7 years ago

Not sure how this is an example of over regulation.

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.

makomk• 7 years ago

One of the other things those CO2 regulations did is push companies towards producing and selling diesel cars that emitted less CO2 but more other pollutants like NO2 and particulates that caused direct and immediate harm. Which lead to dieselgate and then this: "Compliance has gotten harder for automakers as consumers have shifted toward gasoline cars, which emit comparatively more CO2, following Volkswagen AG’s diesel-emissions scandal that first erupted in 2015."

So I guess this isn't so much a footgun moment as a whole series of them.

nemothekid• 7 years ago

It all depends on if, as a European, you see the goal of reducing CO2 justified by the fact that you may be kneecapping local industries in favor of a foreign one.

I wouldn't call it a foot gun moment but it does feel somewhat like a faustian bargain.

rapsey6• 7 years ago

Regulations goal is to reduce CO2 output.

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.

mattlondon• 7 years ago

Ultimately the regulation achieves its goal, reducing CO2.

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.

jayd16• 7 years ago

Being able to skirt emission laws by paying a foreign company loophole is over regulation?

ed_balls3• 7 years ago

It's their fault. They haven't build an electric Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Maserati, Ram Trucks or Ferrari.

Electric Wrangler/Gladiator with a smaller cross-over version would sell like hot cakes.

LoSboccacc2• 7 years ago

the infrastructure in Europe for electric car was disfunctional until a couple years ago, with few recharge point mostly around large cities having incomplete coverage of ports.

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.

markkanof• 7 years ago

Would it? Seems like a lot of Wrangler owners are either people who strap extra gas canisters to their vehicle for extra range in adventure scenarios OR people that at least want to think they have the option to do so (not meant as an insult).

tonyedgecombe2• 7 years ago

Ferrari was spun off from Fiat in 2016.

mitchellgoffpc3• 7 years ago

Sure, you could definitely argue that the EU’s strict environmental regulations make European auto manufacturers less competitive. On the other hand, these regulations are designed to promote social good, not the wellbeing of the manufacturers, and I think the laws are pretty much working in that regard by allowing Tesla to expand more quickly and forcing other automakers to take EV production more seriously. To be fair though, EU lawmakers probably didn’t foresee how long it would take for European automakers to jump on the EV bandwagon, and how much these regulations would help foreign competitors gain a foothold on their continent.

rapsey6• 7 years ago

On the other hand, these regulations are designed to promote social good, not the wellbeing of the manufacturers, and I think the laws are pretty much working in that regard by allowing Tesla to expand more quickly and forcing other automakers to take EV production more seriously.

Great. I look forward to my unemployed well being when the largest EU industry collapses.

tengbretson• 7 years ago

It depends on the timelines on which you are measuring success. If these regulations get all-electric car ubiquity to arrive 5 years earlier, but in the process causes many domestic firms to shutdown, consolidate, etc. we may be sacrificing the competitiveness and innovation in this industry 25-50 years down the road.

It may be that this is a valid trade off to make, but it warrants thought at the very least.

dippersauce2• 7 years ago

The purpose of the emission regulations is to reduce emissions. The regulation does not force manufacturers to pool with foreign companies, nor would such pooling be detrimental to the regulation's goals. By allowing pooling, electric manufacturers are given an advantage, which in turn leads to reduced emissions. Perhaps the problem is that you are misinterpreting the purpose of the law?

gumby4• 7 years ago

Why is this a “foot gun?” If it improves competition and pricing for the consumer isn’t it a good thing?

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.

blackbrokkoli• 7 years ago

Is there more to this argument than thinly veiled nationalism/xenophobia to this argument?

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?

mensetmanusman2• 7 years ago

Tesla is building an EU factory to employ EU citizens...

lm28469• 7 years ago

Damn Europeans prioritizing long term ecological/global goals over short term money!

mprev2• 7 years ago

Fiat have made mostly terrible cars and could have done what Tesla did but chose not to.

My concern, though, is that Fiat get to continue making mostly terrible ICE cars thanks to what feels like green washing.

mitchellgoffpc3• 7 years ago

I mean, there’s only so long Fiat can keep handing billions of dollars to Tesla, so either they’ll eventually go bankrupt or they’ll start producing good electric cars!

toomuchtodo• 7 years ago

The system works!

olyjohn2• 7 years ago

Is the 500E really that terrible?

shiftpgdn• 7 years ago

It is horrible!!! Most of them lose as much as half of their already small range within a few years. I can't believe there hasn't been some sort of lawsuit against Fiat. It's so bad I wonder if it was intentional.

dippersauce2• 7 years ago

Previous revisions of the vehicle had measly 100KM (65 mile) ranges, and were only available to US consumers in California. Fiat also used older cell tech that wasn't as reliable or dense as newer prismatic cells. I do not know if the cells were temperature regulated, but that would explain the range and reliability issues found with the OEM cell packs.

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.

greglindahl3• 7 years ago

It's called a "compliance car" for a reason, and Fiat's CEO said no one should buy one because they're terrible.

iagovar2• 7 years ago

Terrible cars? Which cars? I owned a couple and I'd say Fiats reasonably priced and designed.

AmericanChopper2• 7 years ago

Fiat do have a reputation for making unreliable cars. I have no idea whether it’s deserved or not, but the joke that Fiat stands for “Fix it again, Tony” has been around for a very long time. I first heard that joke in a 1997 episode of King of the Hill, so people have been making it since at least then. Fiat made ads referencing the joke in 2014, so I presume it’s had some staying power too.

LoSboccacc2• 7 years ago

fiat has marvelous compacts. the fire engine derivatives just run forever, the diesel made school twenty years ago and have an edge still today.

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.

woodpanel2• 7 years ago

As a premium SUV driver: Not at all an Alfa fan.

But: Fiat made great progress under their late CEO. The current 500 is a modern icon IMO.

inferiorhuman2• 7 years ago

fiat has marvelous compacts. the fire engine derivatives just run forever, the diesel made school twenty years ago and have an edge still today.

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).

Gravityloss• 7 years ago

I have owned two Fiats and rented one.

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.

Hamuko• 7 years ago

I've heard good things about the Alfa Romeo Giulia.

hinkley• 7 years ago

As an American, I feel like prior to the 500, virtually the only Fiat (or Citroen, for that matter) vehicles we ever hear about are the absolute worst of the worst.

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?

mprev2• 7 years ago

Fiat were famous in the 70s and 80s for producing cars that would rust away before the tires needed changing. Obviously an exaggeration but they used cheap Soviet steel (sometimes called washing machine grade in the motoring press).

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.

woodandsteel5• 7 years ago

My concern, though, is that Fiat get to continue making mostly terrible ICE cars thanks to what feels like green washing.

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.

dsalzman• 7 years ago

“Fiat Chrysler is going to launch a new version of its Fiat 500 battery-powered vehicle in Europe this year, along with plug-in hybrid versions of its Jeep Compass, Renegade and Wrangler models. That, combined with the Tesla credits, should make the company compliant with Europe’s emissions rules, CEO Mike Manley told analysts in July.

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.

new_realist4• 7 years ago

Tesla is a compliance car manufacturer for-hire. If they were serious about the planet (and their own mission statement) they would cease this dirty practice.

HeavenFox• 7 years ago

Why? Sounds like the law is working as intended: subsidizing electric car with ICE car profits

DeonPenny• 7 years ago

It's funny that you believe fiat would if tesla wasn't here just lobby to lower the regulation like every other time. At least in this case its funding electric car companies instead of giving money to a government.

hogFeast2• 7 years ago

One thing that pretty much everyone underestimated here is exactly how good Musk is at finding other people to pay for stuff.

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.

etaioinshrdlu3• 7 years ago

Musk seems to be really really good at working his customers, suppliers, governments, financiers, media, and public. In addition to having rather spectacular engineering sense. It's like a perfect storm for being a business magnet.

hogFeast2• 7 years ago

Yep, I would definitely disagree with you there. Tesla is all sizzle and no steak. He would make a great financial adviser or sales guy at a hedge fund...I am sure that anything else he touches would turn to shit with great rapidity.

seieste• 7 years ago

I think you mean magnate; a magnet goes on your refrigerator.

Fiat will effectively fund Tesla’s German factory

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