This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Fiat-Chrysler's Electric Car Gamble: First Drive

NEW YORK ( TheStreet) -- In 2013, sales of plug-in cars in the U.S. are estimated to total 125,000.

That's only 0.78% of the 16 million cars and light trucks that will be sold in the U.S. this year. But the percentage of plug-in cars is not evenly distributed across the country.

The largest share of plug-in vehicles is sold in California, and inside California the highest density is in Silicon Valley -- the area from San Francisco to San Jose. That's where Google (GOOG), Apple (AAPL), Facebook (FB), Intel (INTC), HP (HP), Yahoo! (YHOO), Oracle (ORCL), Tesla (TSLA), (CRM) and most other major technology companies are based.

Anyone visiting the parking lots of these companies and the downtown centers of the towns surrounding them will come to the conclusion that almost half of new cars in some segments sold this year have been plug-in electric cars. In those neighborhoods, I estimate there are close to 15,000 electric cars on the road, a large part of 2013 new car sales -- dramatically higher than the 0.78% nationwide average.

The same thing happened with iPhone adoption in 2007. When the iPhone went on sale on June 29, 2007, adoption was not uniform across the country or even inside California. In the first weeks, it was already a big product in Silicon Valley, whereas the rest of the country and the world caught up in the next few years.

If the explosive growth in U.S. electric car sales continues at the percentage rates it grew in 2011, 2012 and likely 2013, there will be millions of electric vehicles on U.S. roads within a decade.

Fiat-Chrysler probably doesn't want to cede this opportunity by being viewed as a luddite company in Silicon Valley. Although Fiat-Chrysler may be using Nvidia CPUs and GPUs for design-engineering and infotainment in future years, that's not nearly enough.

It is against this backdrop that Fiat-Chrysler is making its first bet on the electric car market in California. It's even going so far as to establish an electric car distribution center in the San Francisco Bay area, which will be deliver all configurations (colors, trims and options) to area dealers within 24-48 hours. In addition, it establishing a second such distribution center in the Los Angeles area, where some electric cars are also sold.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
NSANY $21.25 -1.98%
F $14.46 0.91%
GM $36.02 -0.50%
TM $126.01 1.30%
AAPL $118.13 -0.14%


Chart of I:DJI
DOW 17,837.38 +117.46 0.66%
S&P 500 2,091.65 +11.24 0.54%
NASDAQ 5,131.1370 +22.4710 0.44%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs