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.

I just spent a little more than an hour driving the Fiat 500e about 40 miles. I also rode in the car as a passenger for an additional distance.

This is an electric version of the "new" 500 that Fiat rolled out in North America in 2011. Like its gasoline-powered sister, the 500e's visual design pays homage to the tiny original 500s that were ubiquitous on Italian streets in the '60s and '70s.

The 500e will be in Fiat dealerships in California starting around the middle of 2013. The price will be $32,500 before tax adjustments similar to those made for other electric cars.

What this means is that many Californians will pay $22,500 net, before regular sales tax. In addition, Fiat is offering three-year leases with $999 down, for $199 or $166 a month. These leases also include 12 free rental car days, so you can get a gasoline car for road trips or when you need a moving van/truck.

The Fiat 500e is a straightforward electric car, making it drive similarly to EVs such as the Nissan ( NSANY) LEAF, Ford ( F) Focus and Chevrolet Volt. The basic drivetrain ensures that these cars have far far more in common than not.

In Fiat's case, the battery cells are made by Samsung, and Bosch delivers most of the drivetrain modules, including the whole battery pack and the electric motor. Fiat then integrates the hardware and the software, calibrates it, and produces the whole package in its Mexico plant together with the regular gasoline Fiat 500 models.

The battery has a gross capacity of 24 kWh -- the same as the Nissan LEAF but more than the Ford's 23 kWh -- but the usable portion is as high as 22.8 kWh, a far higher percentage than anything else I've seen as a standard charging mode, which in this car is the only mode.

The battery sits in the floor, from the front of the front seats all the way to the rear "axle." It adds 600 pounds of weight to the tiny car, yielding a total of 2,950 pounds, but it also shifts the weight distribution from 63% front to 53% front. Together with the lowered center of gravity, this significantly improves handling, which I found to be excellent.

The low weight helps contribute an an EPA-certified average range of 87 miles, which is better than its closest competitors, the Nissan LEAF and Ford Focus Electric. The soon-to-arrive Chevrolet Spark EV may come close to this number; we shall see.

The Fiat 500e shares with the Ford Focus Electric the lack of settings for acceleration, charging and braking -- you only get in the car and go; there is nothing to adjust. In contrast, the also-California-only Toyota ( TM) RAV4 EV has a variety of settings for all of these parameters; Chevrolet and Nissan are somewhere in-between.

The acceleration is a bit muted, similar to the Ford Focus Electric but as silky-smooth as any of the competitors. The overall NVH (noise, vibration and harshness) is as solid as any car, period -- matching the class-leading Ford Focus Electric.

Now I'll share my criticisms about this car. It's obviously tiny. That's not an objective negative, but it does severely limit the appeal of this car. I'm sure you're familiar with the regular Fiat 500, and this car is the same small size. I looked at the rear seat for a second, and decided not to attempt to get in. The luggage space is miniscule, too.

That's fine, I guess -- some people are OK with a tiny rear seat and luggage space. At least this car is bigger than a Mercedes Smart Car.

The other problem is that I can't get close to a good seating position, and the culprit is the nontelescoping steering wheel. I need the steering wheel to move at least two inches, possibly three or more, closer to my torso. I'm 6 feet tall, and I have to set the seat back almost straight up, causing extreme discomfort.

The Fiat 500e shares this lack of telescoping steering wheel and resulting bad seating position with the Nissan LEAF, the pre-2010 Toyota Prius and the pre-2007 Mini Cooper. In the cases of the LEAF and Mini, that problem was fixed in those years.

The Fiat 500e will face the most direct competition from the Nissan LEAF, Ford Focus Electric and the soon-to-arrive Chevrolet Spark EV. There are important things we don't know about the Spark, such as the range and exact price and equipment, but here is what we know compared with the Fiat: It's a lot more powerful (more than twice the torque) and it's got a usable back seat.

In terms of charging, Fiat uses the kind of 6.6 kW AC charger that's in the Nissan LEAF and Ford Focus Electric, which is twice the capacity (speed) of any of the two Chevrolet models. On the other hand, the Chevrolet Spark EV also has the 440 AC charger, which should become a big bonus in the coming years.

One word about styling: The Fiat 500e is beautiful, inside and out. It's a major styling statement. Because of this, and because you can't get a comfortable seating position if you're a 6 feet tall, it would indicate that this car is most likely to be bought or leased by short, young, single females, living in the major California cities.

At the time of submitting this article, the author was long GOOG, AAPL, FB and NVDA.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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