Fiat Chrysler CEO Snubs EV motoring
All anybody is taking about these days in the world of motoring is electric (EV) cars. However the heads of popular manufacturers aren’t entirely on board with the idea. Fiat Chrysler Automobiles (FCA) CEO Sergio Marchionne is just one of those people.
During an interview at the Detroit Auto Show Marchionne revealed a key reason why he detests the EV revolution: “it takes away the core competitive advantage of FCA, as well as other major automakers”.
Manufacturers outsource most of the work that goes into building a car, but what they still specialise in is building internal combustion engines (ICE) and ICE drivetrains. If the world transitions away from that process, manufacturers no longer have much of a competitive advantage to hold their privileged places near the top of the economy.
Marchionne is also concerned that if manufacturers transition into 100% electric vehicles, they will lose control over the parts that go into making them. If the popularity of EV models increases, the streamlined and central process they currently use to create them will have to be outsourced, similar to how they’re producing their diesel and petrol models.
“It’s been a very steady, rigorous process of disintermediation,” said Mr Marchionne.
“If we start losing any of that…we will not be able to hang on to any proprietary knowledge and control of that business,” said Mr Marchionne. “We won’t be manufacturing the batteries. We won’t be manufacturing the electric motors that are part of that powertrain.”
Since car brands have been outsourcing their manufacturing process for decades, auto industry experts aren’t too concerned about what will happen if EV vehicles become more popular. This disruption is a natural process of company growth, and most agree that manufacturers need to shift with the market to be successful.
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