Electric Car Converters Remain Vital Part of EV Future

Fiat 500 converted to an electric drive by German specialist Karabag

Long ignored by large automakers, electric cars used to strictly be the domain of an EV cottage industry. Many people thought small electric car makers and converters were doomed now that large car companies like Nissan have moved into the electric car segment, but the metropolitan area of Hamburg (among others) may prove them wrong. The Nissan LEAF is not yet available in Germany, but the electric Renault Kangoo is, and there are already 15 of them driving in the Northern city. Some electric Smarts are also there. But the big uncovered news is that just a few days ago, 16 electric Fiat 500s joined the growing number of EVs driving around Hamburg. I bet you didn't know that an electric Fiat 500 is being made. That's probably because Fiat isn't making them.

Unveiling the fleet of electric Fiat 500 in Hamburg

I'll try to explain. You may remember the Fiat 500 electric concept from last year's Detroit auto show, but it didn't show up again this year. Many people are convinced that a small, cute, electric 500 would be a great city car. Well, everybody but Fiat. And that's fine, because Fiat's refusal to go electric keeps the door open for outside companies to convert them to electric. It's possible to buy an electric Fiat 500 in Germany, in Switzerland or in Italy.

They are basically three different cars, converted to an electric drive by three small local companies. Of course, no one doubts there would be significant economies of scale if there was only one manufacturer, producing larger volumes and selling the cars all over Europe. That would lower prices and bring more sales. More volume should also call for more development, meaning more power and more range. The electric Fiat 500 the Germans got are converted by Karabag. The models are low power and low tech. The motor makes only 20 kW and range is limited to about 62 miles. Worse, this Karabag 500 is more than twice the price of the standard gasoline model, even though total cost of ownership is lower because, in Europe, electricity is incredibly cheap compared to gasoline.

Ironically, the best thing about small businesses may be that they can't find big investors or afford large losses. The three companies converting small Fiats to electric are hardly profitable, yet they're all in a much better financial shape than, say, Tesla Motors. Eventually, one of them could manage to get bigger and sell its cars all over Europe, but there would still be other opportunities for the two others.

There will especially be an opportunity to fill in missing segments in the electric car market. It looks like the electric compact hatchback now belongs to Nissan and Ford, with their LEAF and Focus. There will soon be a fight in the supercar segment. That will be between Audi with its R8 e-tron and the Mercedes SLS E-Cell. That's another segment where small outsiders won't be able to compete, and new ones are emerging—like the plug-in hybrid pick-up truck segment championed earlier this month by GM's former product czar Bob Lutz

Could sales of the pick-up PHEV grow large enough to attract production from GM or Ford? Probably not in the short term. But there's certainly a few buyers for an electric truck today, as there are a few Hamburgers happy to drive an electric Fiat 500 today. They're proud of the one that recently went to the city of Pinneberg.

One electric Fiat 500 for the city of Pinneberg

No doubt it, those low volume converted cars are very expensive, but if there's no other choice, they're better than nothing. There will remain several segments of the market where no large automaker would dare enter with an electric model. Those segments should be filled, one way or another. So what's next after the 500-size compact electric and the plug-in hybrid pick-up truck?