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Welcome back! It's been awhile, huh? Let's talk Fiat … vehicles, not currency.

🚗 This week: The Fiat 500e — a study in lost opportunity. 

Ford launched its electric vehicle strategy with an SUV and pickup. 

GM hitched its electric revival to the gargantuan Hummer EV. 

The first from Stellantis? The itty-bitty Fiat 500e. 

Why it matters: The decision to lead with a retro, affordable compact is intriguing. Too bad the execution so far is sputtering.

The big picture: As EV sales have slowed and sticker prices have remained high, Fiat and parent company Stellantis decided to compete on cost, offering vehicles as cheap as $25,000.

"We are a brand that is very conscious about style and substance and personality. It's also a brand that knows that not everyone can afford luxury," Fiat's head of North America, Aamir Ahmed, tells Axios.

Reality check: The Fiat 500e starts at $34,095 — more than the staid Nissan Leaf and Mini Cooper SE, and as expensive as the longer-range Hyundai Kona Electric.

It also fails to deliver the zippy drive and chic features teased by its candy-red exterior and "la dolce vita" marketing campaign.

Zoom in: The shortcomings reflect deeper issues at Stellantis.

CEO Carlos Tavares has pursued aggressive cost-cutting to shore up Stellantis' margins. That's forced dealers to try to sell cars with older tech and features, and those cars regularly rank among the least reliable in the U.S.

💭 Alan's thought bubble: I wonder whether the decision to dust off the Fiat 500e was driven by the cost savings of using an existing design. 

The other side: "We're still a very, very healthy company," Ahmed told me.

The internal-combustion 500, he points out, debuted in 1957. "We wanted to start by bringing back our crown jewel and our flagship." 

Bottom line: The market needs affordable EVs, and pairing one with iconic design is commendable. 

But it needs to be more than just a coat of red paint.

Cheap car faces high stakes

A photo of a bright red Fiat 500e electric hatchback, parked on the street in front of a real estate storefront decorated with American flags and bunting.

The Fiat 500e, a rollerskate with an engine. Photos: Alan Neuhauser/Axios

Fiat arranged for a 2024 500e Inspi(red) to be delivered to my house outside Providence, Rhode Island, and I drove it for a week around town and on the highway. 

Why it's the BFD: Less la dolce vita than la vita deludente.

Base price: $34,095, including delivery fee.

Price as tested: $34,095. The only option is summer or all-season tires.

Range: 140–160 miles depending on drive mode. 

Charge time: 35 minutes to the recommended 80%. Reasonable. 

Target buyers: Under-40 city dwellers and empty-nesters.

Candy-red paint would make a lollipop jealous.

Worry-free parking. This thing feels as if it could squeeze into a phone booth.

Confusing startup procedure that requires two button presses instead of the customary one. 

Ugly, underpowered software. The rearview camera needs at least 2 seconds to wake up after shifting to reverse.

The stereo sounds as if Fiat engineers bundled a bunch of old cellphones and shoved them into the doors. 

Plus: The doors. Specifically the buttons that open each door.

Have you ever worried about your kid or dog falling out of a moving car just because they leaned on the wrong button? Would you like to?

Bottom line: There are two reasons to buy this car: 

You run the local parking authority and don't care about anything other than squeezing into curbside spots to check the meters.

You live in an apartment and your sole priority is street parking.

Driving the Fiat 500e

A photo of the interior of the 2024 Fiat 500e electric hatchback, with dark gray seats, red trim and a bright red dashboard.

The interior, including the door-opening buttons at far left and right.

There's a question that's become a cliche in clean-energy circles: Why won't U.S. automakers make a cheap, reliable compact EV?

Why it matters: Small electrified models sell faster than you can say "whir."

State of play: Chevy's snub-nosed Bolt EV, priced as low as $25,600, became a surprise perennial bestseller.

Ditto Ford's diminutive Maverick pickup, a $26,000 hybrid whose mileage nearly rivals some Toyota Prius hatchbacks.

Between the lines: U.S. drivers want small EVs and hybrids. They just don't want to pay out the nose to get them.

Driving the news: The Fiat 500e offers a postcard-sized portrait of what happens when engineers and designers focus on the wrong things.

Zoom in: Take those head-scratcher door buttons. Each door also includes a traditional handle — so why bother spending on some needless button?

That wasted money could've been used on speakers that don't sound like found-audio from the 1950s. Or to squeeze more muscle from the powertrain. Or to install a dashboard that feels sturdier than your kid's plastic beach bucket.

The big picture: It's these shortsighted decisions that make one wonder about the business strategy at large.

Already, in light of Stellantis' dismal Q2 earnings report, speculation is swirling over which vehicles and brands might get the axe. 

"There's absolutely no taboos," CEO Tavares told Bloomberg about potentially cutting one of Stellantis' 14 brands. "If they are not able to monetize the value that they represent, then decisions will come."

By the numbers: The 500e went on sale in the U.S. this year. But it delivered only 163 models through the first half of 2024, per Automotive News data.

👀 What we're watching: Fiat is trying to shake up its sales.

Instead of offering car shoppers a ton of options, it's adopting strategy from luxury retailers, music labels and sneaker companies to periodically "drop" a new design with different features.

It's a clever way to streamline production — and align with  Stellantis cost-cutting — while potentially stoking anticipation about the next 500e model.

Yes, but: The best sales strategy in the world won't save a dismal product — especially one that has a history of reliability problems. 

"It's important for us to simplify the process," Ahmed says. "One of the easiest ways we can simplify it is by not offering too much distortion into the product plan." 

When compact constricts

A photo of a bright-red Fiat 500e electric hatchback, parked in front of a single-family home.

Arched eyebrows accent the Fiat 500e's headlights.

Fiat's head of North America, Aamir Ahmed, spent more than half an hour this week responding to my critiques and questions.

Context: Ahmed, who was tapped to lead the division last year, brings a background spearheading software development and marketing — experience that's deeply informing Fiat's American return.

Why bring back the 500e and lead with it in the U.S.?

Fiat — the first thing that pops into anyone's mind is the Cinquecento. We sell more Fiat Stradas in Latin America and South America. But when we talk about putting our best foot forward and how we want to introduce the brand, it starts with the 500.

About the software, acceleration and sound issues:

🖥️ It's the same unit as a $300,000 Maserati. UConnect has been tried and tested and globally admired. 

🛞 This car is 50 pounds less than the 2019 500e. We've made a bigger car that's lighter and travels twice as far. Stoplight-to-stoplight in a city, it is pretty zippy. It's just not going to set your hair on fire on a dragstrip. 

🔊 We do have an Inspired by Music model that comes in tuxedo black. That comes with a seven-speaker JBL Audio system. We've held onto that to make this a unique drop of a 500. 

Each car is its own vehicle "drop." We tried to design a very simple product plan to not confuse people. 

To do a proper distribution model and lower our cost of distribution, it's important to simplify our process.

Fiat chief responds

Photo illustration of Aamir Ahmed next to a pattern of Fiat logos.

Aamir Ahmed. Photo illustration: Axios Visuals. Photo: Courtesy of Stellantis

Data: Automotive News, InsideEVs, Cox Automotive; Chart: Erin Davis/Axios Visuals

Fiat's 500e sits near the bottom of the list, at least so far.

It's just ahead of the Genesis G80 Electrified sedan, which posted 140 sales through H1. 

The 500e, meanwhile, lags the BMW XM SUV (1,078), Vinfast's debut VF8 SUV (1,000), and Volvo's C40 SUV (615 sales).

How the sales stack up

That's it! Thanks to George Moriarty and Brad Bonhall for edits, and thank you for tuning in to Wheels.

August 24, 2024

1 big thing: Cheap car faces high stakes