Fiat Chrysler Automobiles' Electric Minivan: A Huge Missed Opportunity

By John Rosevear Markets Fool.com

FCA'sChrysler Portal concept is a futuristic take on a vehicle for families, but it's just for show. FCA has no plans to build it. Image source: FiatChrysler Automobiles NV.

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Fiat Chrysler Automobiles NV(NYSE: FCAU) has released some information on the Chrysler Portal concept car that it plans to unveil on Tuesday at the Consumer Electronics Show (CES) in Las Vegas.

The Portal is a futuristic take on a highly connected electric minivan. It's an intriguing idea. But it's also a huge missed opportunity -- and a troubling sign for FCA investors.

A potential Tesla competitor, if it were real

FCA said that the Portal "explores the possibility of what a family transportation vehicle could look like." It has some self-driving capabilities, FCA said, and the ability to connect to personal devices and "the cloud" in ways that will help to keep the kids entertained on long (or not so long) trips.

FCA said that the Portal has a battery-electric drivetrain with 250 miles of range. Its battery packs are built into the floor, in the style of Tesla Motors (NASDAQ: TSLA). Fast-charging capability will be able to add 150 miles of range in about 20 minutes.

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Simply put, the Portal represents an intriguing and advanced potential competitor to Tesla's Model X, one that could turn the market for "kid-hauler" vehicles on its head.

Or it would, if FCA planned to build it. But the Portal is strictly a show car -- and that's the problem.

This isn't the electric minivan FCA desperately needs

Here's why it's a problem: The auto industry is changing rapidly, but there are few signs that FCA is taking steps to keep up. This show vehicle doesn't really change that, but an electric vehicle intended for production might have.

Right now, FCA has pickup trucks and Jeep SUVs and Hemi V8s, along with a nice new minivan. (And, to be fair, a brand-new hybrid version of that minivan.) They're popular products and sales have been good. But with no hybrids or electric vehicles to offset them and improve its corporate fuel-economy average, FCA is headed for trouble.

The Portal's dash is a show-car flight of fancy. Image source: FiatChrysler Automobiles NV.

FCA does have a deal with Alphabet's (NASDAQ: GOOGL) (NASDAQ: GOOG) Waymo self-driving car subsidiary that has produced some self-driving test vehicles and a version of FCA's touchscreen system that integrates the Android operating system. But it's lacking a range of hybrids and a serious electric-car effort as fuel-economy rules tighten -- and that's going to be a big problem in a few years.

The contrast with FCA's old Detroit rivals is instructive. General Motors (NYSE: GM) has a long-range electric car in production and a massive effort under way to develop self-driving technology in-house. Ford (NYSE: F) also has a big self-driving development effort under way, along with a range of well-regarded hybrids and clear, credible plans to add many more electrified vehicles over the next few years. And both have made it clear that they are grappling seriously with the larger technology-driven changes coming to the business of autos.

Chrysler wouldn't have missed this huge opportunity, but FCA did

Not all of the incumbent global automakers will be able to make the leap into the not-too-distant electrified, self-driving, ride-hailing future. Some will be displaced (or "disrupted") by new entrants like Tesla and Waymo. It's a good bet that GM and Ford will be important players in that future, because they're taking the steps to get there now. FCA, which is struggling under a huge debt load, hasn't kept up.

A fully electric version of theChrysler Pacifica would have been a more impressive statement by FCA. Image source: FiatChrysler Automobiles NV.

At several points in its long and checkered history, the old Chrysler Corporation was able to dodge corporate death with a brilliant new product at just the right moment. FCA had the opportunity to do that today -- and frankly, when he heard that an electric minivan was in the works, your humble Fool expected a classic Chrysler masterstroke.

Imagine if instead of a futuristic concept, FCA had shown a long-range electric version of its current minivan, the gorgeous Chrysler Pacifica -- and had announced plans to put it into production. Sure, it might take a few years and a huge internal effort to bring that vehicle to market, given that FCA is starting from behind. But it would have the potential to be the first electric vehicle that really connects with the mass market: an electric minivan perfect for tech-savvy young families.

An electric Pacifica would have been a much more powerful statement that FCA sees the future coming and plans to join it in bold style. Instead, it built a vehicle that is just for show, with technology that might or might not actually exist. That also makes a statement, and not a good one.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Rosevear owns shares of Ford and General Motors. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Ford, and Tesla Motors. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.