Honda and Fiat See a Dead End for EV Programs

Fiat 500

Although the demand is there and both Honda (NYSE:HMC) and Fiat (FIATY.PK) boast long waiting lists for their electric vehicle offerings — the supply of the vehicles is spoken for for the remainder of the year – the companies have decided not to increase production, as the Honda Fit EV and the Fiat 500e are simply meant to be compliance vehicles.

In other words, the two electric compacts were made solely for the purpose of helping the two companies meet the strict California zero-emission vehicle requirements that kicked in last year. The cars are made in numbers just large enough to make the state happy, but no more than that.

Fiat has reiterated that although the electric version of its 500 has been immensely popular, the company is building the vehicles at a loss, and is only producing them because it has to. Honda has similar sentiments toward battery electric vehicles. Though the company has not explicitly said so like Fiat, its Fit EV strategy speaks volumes.