Fiat & Volkswagen EV plans don’t meet consumer needs

The electric vehicles are slowly taking off and despite their limitations, they are already a valid choice for many consumers around the world. The EV plans announced by many auto makers include lots of products and promising mobility solutions. Fiat and Volkswagen plans feature some models that are not aligned with the consumer needs.

The consumer wants SUVs

Fiat and Volkswagen are not the only brands to base their electrification plans on products that are not appealing to the public. Renault, Peugeot and other mainstream brands in Europe focus their efforts on the development of cars that don’t meet the current expectations of consumers.

They all have two things in common. One is that they have big announcements and a lot of marketing related to the new presentations. The coming Fiat 500 BEV is FCA’s biggest and probably unique presentation in 2020. The management is currently spending most of the budget and probably all energies on the launch of this new car at Geneva 2020.

The coming Fiat 500 BEV is FCA’s biggest and probably unique presentation in 2020.

In the meantime Volkswagen just confirmed how impressive it can get when it reveals an all-new model. The Volkswagen ID.3 was the car of the show at Frankfurt 2019. It is the first standalone electric car from the brand and is due to play an important role in the European market. PSA also revealed the Peugeot 208-e in Geneva 2019, and Opel did the same with the Corsa-e in Frankfurt.

The other thing in common is that they are all traditional cars powered by an electric engine. The Fiat 500 BEV is just an electric city-car that aims to replicate the success of the gasoline versions. The Peugeot 208-e, Mini Cooper SE, Opel Corsa-e join the B-Segment to compete against the Renault Zoe; and the Volkswagen ID.3 sits somewhere between the C-Segment (against the Nissan Leaf) and the C-MPV segment. None of them feature the bodytype that the consumer looks for.

Hatchback sales fell by 10% in H1 2019

Despite the big announcements, amazing presentations and ambitious targets, the truth is that the latest EV stars join a segment that is dropping. It is not only about having the right technology, or at least the trendy one; it is also about putting it in the right package.

Consumers around the world are clearly saying that they don’t like hatchbacks anymore. Global sales (with Europe counting for 43% of total) fell by 10% to 7.5 million units in H1 2019. It was a higher drop than the one registered by the sedans and certainly far away from the tiny drop recorded by SUVs.

Even worse, two of the largest markets – China and USA – don’t buy this kind of cars. While their sales posted double-digit drops, their market share did not exceed the 5% of sales. In contrast, they still represent an important part of the market in Europe: 37%. However, without the volume in USA and China, a hatchback can’t ever be considered as a global vehicle.

Electric SUVs: very expensive to produce

So why Fiat, Volkswagen, Peugeot and Opel designed hatchbacks and not SUVs? because the electric vehicles are still very expensive to bring to life. Producing a SUV would be more expensive and the final price would be far away from the 25,000-35,000 euro range of the hatchbacks.

The only exception here is Hyundai and Kia, which launched the electric versions of the Kona and Niro and are somehow selling well in Europe. Nevertheless, with the current prices, they will never make a difference in terms of sales volume.

The latest launches and the ones to come confirm that the industry is still far from making of the electric a vehicle for the masses. A lot have been done so far: better batteries, more range, more appealing designs. However, the price, which is the key element to take off, is still an unsolved problem by all makers, even the biggest and most powerful.

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7 thoughts on “Fiat & Volkswagen EV plans don’t meet consumer needs

  1. Hello Felipe!
    When I read the title of your article my first thought was about something you did not mention: Fiat is ready to build until 80.000/Yr 500 BEV.
    In 2007 Fiat did not sell 2 or 3x more Fiat 500 because they did not antecipate its success. I new a city manager that would hide it from exibitions, because he did not have enough cars to sell.
    Will it happen again?

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  2. Hi Felipe

    Thanks for another interesting article

    Slightly off topic, but do you have any more info on whether 500e is likely to be an all new model? Autocar magazine recently reported that this will be an all new model, possibly even with ‘suicide’ doors, but have not seen any reference to this elsewhere

    Thanks

    David

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  3. Thank you for the information Felipe, very good to hear that Fiat are committing investment to an all new model (at last!) Let’s hope that this is the start of full relaunch of the Fiat brand, with the range bolstered with the A-C SUVs that you mentioned in a previous post. Do you think that there has been a change in focus by management (since the last business plan presentation), and Fiat is now being given investment priority over Alfa Romeo? I only ask this as it appears that all investment on Giorgio platform models (for Alfa Romeo) has been frozen, which seems odd given the investment made in that platform

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    1. The usual amazing management skills from FCA… first they spend billions developing and building the best platform… afterwards they “forget” that it was meant to build new cars…

      Like

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