Chrysler will soon introduce the world to its very first battery-powered vehicle, the Fiat 500e.
However, far more interesting than the fact that it’s their first battery-powered car is the fact that Chrysler expects to lose between $8,000 and $9,000 for each one it sells, according to the Wall Street Journal.
Why would they produce a car that’s sure to lose money? One word: California.
Let us explain.
California has one of the largest car markets in the country (it accounts for nearly 10 percent of all U.S. auto sales). California also has a strict zero-emission requirement.
So unless Chrysler offers a model that meets these increasingly stringent emissions standards, California could bar them from selling cars in the state.
Pretty great, right?
But wait! There's more! Ten other states, including New York, New Jersey, and Maryland, have followed California’s lead and have enacted similar zero-emission requirements. And much like California, Chrysler could be barred from selling cars in these states unless it offers a vehicle that meets these standards.
Problem is, nobody seems to want zero-emission vehicles.
California "can make us sell a minimum amount of cars, but unfortunately, they can't make people buy them, or even get our own dealers to order them from us," Kevin Kinnaw, Toyota's U.S. manager of regulatory affairs, told the Wall Street Journal.
In short, in order to stay compliant with these various carbon emission laws, automakers must design and produce cars that no one will buy.
“So far this year, only about 26,000 electric vehicles have been sold in the entire U.S., a tiny fraction of the 11.9 million cars and light trucks Americans have purchased,” the Journal report notes.
“About one in four electric vehicles sold are in California,” the report adds.
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Front Page photo source courtesy PR Newswire. This story has been updated.