Honda and Fiat See a Dead End for EV Programs

Fiat 500

Although the demand is there and both Honda (NYSE:HMC) and Fiat (FIATY.PK) boast long waiting lists for their electric vehicle offerings — the supply of the vehicles is spoken for for the remainder of the year – the companies have decided not to increase production, as the Honda Fit EV and the Fiat 500e are simply meant to be compliance vehicles.

In other words, the two electric compacts were made solely for the purpose of helping the two companies meet the strict California zero-emission vehicle requirements that kicked in last year. The cars are made in numbers just large enough to make the state happy, but no more than that.

Fiat has reiterated that although the electric version of its 500 has been immensely popular, the company is building the vehicles at a loss, and is only producing them because it has to. Honda has similar sentiments toward battery electric vehicles. Though the company has not explicitly said so like Fiat, its Fit EV strategy speaks volumes. Honda Fit EV

Honda plans to lease only 1,100 Fit EVs over the three-year regulatory period, with the emphasis on lease — one cannot purchase the Fit EV at all. After that, the company reclaims them, “relieving itself of 10 years’ worth of parts and maintenance obligations,” Green Car Reports notes. The program is eerily reminiscent of the EV1 program launched by General Motors (NYSE:GM), which resulted in (nearly) all the EV1 vehicles being crushed.

Jason Stoicevich, Fiat’s new U.S. leader, says the Fiat 500e has in fact been immensely popular. ”The 2013 model year [of the 500] through the fourth quarter is pretty much spoken for,” Stoicevich said to Green Car Reports. “The demand is absolutely fantastic.” But “we have no plans to turn it up,” he adds.

With new entrants to the EV field and lower prices encouraging buyers to overcome their anxieties about range and lack of infrastructure, more EVs are hitting the roads, hopefully helping an EV infrastructure become a more worthwhile investment. If the trend continues, perhaps Honda and Fiat will take a second look at their EV programs.

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