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Fiat will effectively fund Tesla’s German factory
- KingMachiavelli 7y agohttps://web.archive.org/web/20200110194339/https://www.bloomberg.com/news/articles/2020-01-09/fiat-will-effectively-fund-tesla-s-german-factory-baird-says https://web.archive.org/web/20200110194339/https://www.bloom...
- deleted 7y ago[deleted]
- rapsey 7y agoEU laws forcing an EU car maker to fund their (foreign) competition. Classic foot gun moment as a result of over regulation.
- avianlyric 7y agoNot 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 7y agoOne 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 7y agoIt 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.
- avianlyric 7y agoFor me preventing climate change is pretty non-negotiable. I’m rather a fan of having a liveable planet, and as some that lives in London, I’m acutely aware of what sea level rise will do to my home. 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.
- greglindahl 7y agoTesla's German plant will be a part of the EU automotive industry, right?
- avianlyric 7y agoAbsolutely true. Although I’m assuming some people will take offence to the idea of it being run by an American owned company.
- rapsey 7y ago> (and Tesla is tiny compared to the likes of VW) Check the market cap.
- ziftface 7y agoOr don't, because that's entirely irrelevant
- tonyedgecombe 7y agoIn 2018 Tesla made 87,000 vehicles, VW made 10.5 million.
- rapsey 7y 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.
- avianlyric 7y agoThe goal is to reduce CO2, not create more electric cars. That’s just one possible solution. 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.
- rapsey 7y ago> The goal is to reduce CO2, not create more electric cars. That’s just one possible solution. 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.
- avianlyric 7y ago> Well shooting yourself in the foot is a pretty bad way to achieve those goals. 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.
- mattlondon 7y 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.
- torpfactory 7y agoIt’s an economic disincentive for Fiat to continue producing them. Sure Fiat could continue to sell those cars, but being on the hook for shoveling Tesla $2bn every few years isn’t a winning long term strategy. Hurts Fiat, helps a company that’s got much better CO2 performance. CO2 will be reduced because it will now be in Fiats financial interest to produce EVs. It certainly won’t happen overnight but the incentives are clear for Fiat.
- woodandsteel 7y agoNo, the standards keep going up, so Fiat still has to change. It already knows this, and its problem is it is not yet really to start manufacturing a lot of ev's. This gives them another year or two to get ready.
- jayd16 7y agoBeing able to skirt emission laws by paying a foreign company loophole is over regulation?
- ed_balls 7y agoIt'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.
- LoSboccacc 7y agothe 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 7y agoWould 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).
- ed_balls 7y agoMost wranglers don't see proper off-roading, none of the crossovers. But even though, you have the whole front trunk where you can add a range extender (similar to BMW i3). You can strap extra canisters - range is not an issue. 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.
- tonyedgecombe 7y agoFerrari was spun off from Fiat in 2016.
- ed_balls 7y ago
- mitchellgoffpc 7y agoSure, 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.
- rapsey 7y 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.
- TomMarius 7y agoWell if you're anywhere in western EU, thanks to the social system, it shouldn't be destructive to you. Not that I support it, but I frequently hear support of it from the automotive industry people (especially VW and Skoda) - you should use it then.
- mitchellgoffpc 7y ago
- dippersauce 7y agoThe 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?
- gumby 7y agoWhy 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 7y agoIs 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?
- mensetmanusman 7y agoTesla is building an EU factory to employ EU citizens...
- lm28469 7y agoDamn Europeans prioritizing long term ecological/global goals over short term money!
- mprev 7y agoFiat 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.
- mitchellgoffpc 7y agoI 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 7y agoThe system works!
- olyjohn 7y agoIs the 500E really that terrible?
- shiftpgdn 7y agoIt 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.
- olyjohn 7y agoThat explains why I can pick them up on Craigslist for around $7000 used. But I mean, even with only a 35 mile range, I could still get to work and back every day. For $7k, that seems like a damn good way to get into EVs. Aside from the range issues, are there any reliability concerns?
- davidgould 7y agoLook for a Chevy Spark EV, only a little more expensive, even more fun to drive, way more practical, and extremely reliable. Not as cute though.
- dsalzman 7y 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_realist 7y agoTesla 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 7y agoWhy? Sounds like the law is working as intended: subsidizing electric car with ICE car profits
- new_realist 7y agoIt undoes all the good from buying their cars. For every Tesla I buy, someone else gets to pollute more. It’s legal, but it’s immoral.
- lern_too_spel 7y agoIt's the opposite. For every Fiat that is purchased, Teslas become cheaper. Purchasing a Tesla does not make a Fiat cheaper.
- new_realist 7y agoMy interest is greenhouse gas emissions, not in wealth transfer shell games. 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?
- hogFeast 7y agoOne 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.
- etaioinshrdlu 7y agoMusk 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.
- hogFeast 7y agoYep, 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.
- etaioinshrdlu 7y agoI assure you Musk has great engineering talent. Sometimes it looks like he doesn't because he demands progress faster than is reasonable and chaos and failure is the result.
- woodandsteel 7y agoNo, that's all wrong. He has build up a company that produces the best ev's in the world, and is forcing all the other companies to follow his lead, and in the process helping save the climate. Which you apparently don't care about at all.
- ryuukk_ 7y ago