Fiat Chrysler's Green Autos Have a Problem: They're Not for Sale

By Chester Dawson Features Dow Jones Newswires

Criticized for lacking efficient vehicles in its lineup, Fiat Chrysler Automobiles NV has taken steps to introduce some of the industry's most fuel-efficient cars. The problem is few of them are for sale or even being built.

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The centerpiece of Fiat Chrysler's efforts is the new 84-miles-per-gallon hybrid gas-electric Pacifica minivan. But for many potential customers, the vehicle has been as hard to find as the flying pigs, blue moons and two-headed dogs featured in ads for the industry's first hybrid minivan.

The auto maker, which created the minivan segment in the 1980s, has suspended production of Pacifica hybrids in recent weeks amid a planned recall of the vehicle due to technical glitches, people familiar with the matter said. Fiat Chrysler hasn't disclosed the suspension publicly.

The delay has irked buyers, who have high hopes for the well-regarded vehicle. Among them is Google's parent company -- the single biggest buyer so far -- whose engineers use it to test self-driving systems.

The flawed product rollout is a "black eye," said Bill Bernard, general manager of Chrysler dealership in Fredonia, N.Y. "Chrysler does a very poor job of launching new products."

The setback comes as the company stockpiles the "EcoDiesel" versions of its 2017 Ram pickup trucks and Jeep Grand Cherokee SUVs after the government alleged the company used illegal emissions software, a move that has delayed regulatory certification by months.

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The glitches cast doubt on the company's ability to boost its fuel-economy ranking, the second worse after Porsche among global auto makers. It also raises questions about its readiness to meet increasingly stringent emissions standards hitting the American auto industry in coming years.

Fiat Chrysler sees the issues as temporary setbacks, and officials say Pacifica hybrid production will resume in time to meet outstanding orders. The EcoDiesels, it says, will be certified by regulators once their concerns are addressed.

The company's lineup now emphasizes horsepower over green as it boosts production of higher profit margin SUVs and pickup trucks. It says current consumer demand for fully electric vehicles doesn't now warrant greater production and marketing of such autos.

Prior to releasing Ecodiesels and the hybrid minivan, the auto maker's most visible fuel-efficiency play was the Fiat 500e. However, the pricey city car is available in only two states and the company loses money on each sale.

The hybrid Pacifica, built in Windsor, Ontario, made its debut earlier this year but has been plagued by launch delays, including the major recall this month for a defect that could potentially shut down engines on the nearly 2,000 models sold so far.

"The most information I can get is that it is being audited for safety," said David Pittman of Silver Spring, Md., who ordered a hybrid Pacifica in April and is waiting for it to be delivered.

The growing backlog of such buyers could weigh on the company's reputation and bottom line. Fiat Chrysler has handed out $500 pre-paid credit cards or high-speed electric chargers to compensate. Some of its dealers have also lent vehicles to owners who have received the car, as they await the recall to be fixed.

Fiat Chrysler hasn't said when the flaw would be fixed or when production would resume. In a letter to dealers, viewed by The Wall Street Journal, Fiat Chrysler said a sudden loss of power from defective inverter diodes "could cause a crash without a warning." A recall isn't expected to begin, however, until the third quarter.

"It's been radio silence," said Chris Filkins, 40 years old, who lives outside of Buffalo, N.Y. and awaits a Pacifica hybrid he ordered in March. "If you have a lease coming due or your car is about to die, I wouldn't put your eggs in this basket."

Among those taking notice was Alphabet Inc.'s Google car team, which is now named Waymo. The Pacifica hybrid is spacious and runs on a high-powered battery with a backup gasoline engine if juice runs out -- a combination Google sees as ideal for autonomous-vehicle testing.

The Silicon Valley tech giant has about 100 hybrid Pacificas in its fleet and has ordered 500 more. Neither Waymo or Fiat Chrysler would say if any of those additional vehicles have been delivered.

Dealers are also in a jam.

"I need about 20 of them," said Brad Davis, vice president of Glenn E. Thomas Dodge Chrysler Jeep near Long Beach, Calif. "We sold the only four we received the day they arrived," he said. The dealership said has a waiting list of more than 30 prospects for the van.

The hybrid problem follows Fiat Chrysler's delayed push into diesels, a technology that is more efficient than gasoline but under scrutiny following Volkswagen AG's emissions-cheating scandal in 2015.

The Environmental Protection Agency alleges that Fiat Chrysler may have sought to undermine emissions tests on its diesel versions of the Ram pickup and Jeep Grand Cherokee. The Justice Department sued the auto maker in May for knowingly using software that allowed cheating on such tests. The company denies the allegation.

Write to Chester Dawson at chester.dawson@wsj.com

(END) Dow Jones Newswires

June 24, 2017 08:14 ET (12:14 GMT)