Fiat future in U.S. tied to new leader, return of 500e

Fiat has all but faded away in the U.S., but it has a new North American leader whom parent company Stellantis has charged with "providing cool mobility solutions for all."

Fiat could use that cool factor when it reenters the U.S. electric vehicle race in 2024 with the 500e, a model that analysts say can open a pathway to success for a brand that has struggled with lackluster sales in the country for years.

The stage is set for Aamir Ahmed, a former Fiat Chrysler Automobiles marketer appointed to head Fiat's North American operations last month. Ahmed left FCA in 2017 to work for Harman International and Amazon. Ahmed succeeds Larry Dominique, who had been leading Fiat in addition to his role as senior vice president for Alfa Romeo in North America.

There's a tough job ahead.

Although the brand has been a major player globally, it hasn't been able to find its footing in the U.S. market, where it sells only the 500X. Fiat sold just 138 vehicles in the first quarter of 2023.

Despite Fiat's rocky track record since its 2011 return to the U.S., industry observers say the 500e could bring viability to the brand as automakers move aggressively toward electrification. The 500e, according to Fiat CEO Olivier Francois, is coming back to the U.S. to capitalize on the industry's EV revolution.

Analysts say Fiat's best bet may be to settle in as a purveyor of budget-friendly EVs.

The original 500e was a compliance car with a limited 84-mile range sold only in California and Oregon. Affordability was its primary selling point, with leases for as low as $69 a month in Southern California with no money down.

Today, the European version of the 500e, called the New 500, is among that continent's top-selling EVs.

"If they could come to market with something very small and electric and [with] better range, that's the kind of vehicle that can turn some heads," Ivan Drury, director of insights for Edmunds, told Automotive News. "Right now, the average ATP for an EV is $60K, and while [EVs are] pulling in a lot of buyers and a lot of money, we know there's people that don't want to spend that. They're not looking to buy a used one, either."

Drury said the new 500e could find itself competing with Tesla Inc. at the lower end of the market. It has been rumored that Tesla could launch a high-volume model in the $25,000 range.

The Fiat 500e was around $35,000 before being pulled from North America in 2019.

The 500e would need a more acceptable range, Drury said, but it could stand apart from Tesla by offering better "amenities and styling than what Tesla might be showing with that little hatchback they're talking about for $25,000. ... We really don't have a lot of products coming down the pipeline in that area."

When Francois announced at the 2022 Los Angeles Auto Show that Fiat was bringing the 500e to the U.S., he said the brand had no plans to expand the portfolio. Francois said at the time that the brand learned a lesson in humility during its U.S. comeback attempt.

With the 500e, Francois said Fiat will stick to its space, which is to offer "polarizing, niche, unique" statements. Francois said that's where the American consumer needs it to be.

"With all the brands coming in to this market [with] EVs, you've got to find a white space, and that ends up being entry-level," said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. "Fiat is not a brand that demands a high price.

"There's no huge following for the brand, so you have to define it as affordable EVs."

Brian Moody, executive editor for Kelley Blue Book and Autotrader, said a low-priced, medium-range EV would be a good fit for suburban buyers in the U.S.

"Fiat could yet have something to offer consumers," Moody said. "As many cars add more and more safety and comfort features, a few things are starting to stand out: unique, compelling design, and the idea of owning something truly different are hallmarks of Fiat. Design is a big differentiator today."

Fiat doesn't have grand volume ambitions for the EV. Francois said last year that he doesn't plan to invest a ton of marketing cash into the 500e to persuade people to buy a car that isn't for them.

The 500e's debut next year will give the brand two vehicles.

Thus, the 500e will need to deliver if Fiat wants to gain traction in the U.S., said Matt Degen, senior editor of Kelley Blue Book and Autotrader.

"A lineup of just two small, niche vehicles is a hard sell to both customers and dealers alike," Degen said. "The 500X, for as cute as it is, is getting old, is no longer competitive in its class, and its sales volume barely registers. That puts immense pressure on the reintroduction of the 500e."

Degen said "the previous 500e was certainly stylish and fun," but "it never was on the radar of EV shoppers. I think the new 500e will have to be a gamechanger if Fiat wants to be relevant in the U.S. market."