Fiat-Chrysler CEO Compares Tesla to Dot-Com Bubble

Sergio Marchionne, CEO of FIAT and Chairman of Ferrari ahead of the Formula One Grand Prix of China at Shanghai International Circuit on April 17, 2016 in Shanghai, China.

Sergio Marchionne, CEO of FIAT, at Shanghai International Circuit on April 17, 2016. | Clive Mason/Getty Images

There are many mysteries in this world. How Fiat-Chrysler CEO Sergio Marchionne feels about electric vehicles is not one of them. Marchionne has gone on the record telling people not to buy the all-electric Fiat 500e in the past, and his take on the prevalence of outsourcing EV technology confirms he’s not excited about industry trends. He doesn’t believe Tesla is a sure thing, either, and went as far as to compare the automaker’s inflated stock to the dot-com bubble in an interview.

“Electrification may be the next big thing, but I’m amazed by the impact of Tesla’s new Model 3,” Marchionne told CAR Magazine (per Hybridcars.com). “With 300,000 orders in hand, their stock is up – again. It reminds me of the Internet bubble. But where is the business model that will work in the long term?”

Tesla Model 3 black profile

Marchionne sees the Tesla Model 3 and thinks dot-com bubble. | Source: Tesla

The FCA chief did not come off as terribly impressed by Tesla in general. “There is nothing Tesla [does] that we cannot also do. We build cars, sell them and are still able to pay the bills,” he told CAR. “But I’m not even sure you can recover all of your costs – let alone generate a profit – through electrification.”

Judging by his comments, Marchionne seems reluctant to believe the Gigafactory will ever become a reality. Otherwise, he could see how the economy of scale would lead to a drop in battery prices in the near future. (Battery prices have been dropping for years, even before Tesla announced Model 3.) But he also was in the mood to poke fun of Tesla as a fad.

Tesla

The Fiat-Chrysler CEO considers Tesla dot-com bubble material. | Source: Tesla

“Welcome to the world of icons!” Marchionne told CAR in the interview. “I don’t make iPhones. I make cars. Why don’t I make the iPhone of cars? Because if it looks and smells like Tesla, I don’t know how to make that economic model work.”

Marchionne did come across as bullish on autonomous driving technology, calling it “a mandatory future option and not even expensive.” Some may have seen this coming given the partnership between Google and FCA on self-driving Pacifica minivans. But Tesla has to be considered the leader in this technology so far. Even with the blips that have appeared on the radar, Model S owners have been enjoying semi-autonomous driving since late 2015.

As far as racking up profits on this emerging technology, Tesla seems to have its ducks in a row with the Model 3 following the highly successful Model S and impressive (if troubled) Model X. Marchionne has every right to be skeptical of the company that may do what his team never could: make money on electric vehicles.

Yet there is one point Marchionne was wrong about, and that was saying his company can do everything Tesla can. Neither Fiat nor Chrysler has been able to nail the highest rated car in Consumer Reports history. Tesla may have its troubles making profits early in the business, but it’s come closer to a perfect car than any automaker in the modern era.

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