Earlier today, FCA announced that they’ll be splitting Ferrari off as its own separate company. In this split, 10% of Ferrari shares will be available for the public to buy, and the remaining 90% will be split amongst current FCA shareholders. That’s big news in and of itself, and something we’ll go more into in future posts. But the question that currently piques our interest is the idea of Corporate Average Fuel Economy, or CAFE. According to CAFE standards, each car company has to have an average miles-per-gallon when all of their vehicles’ mileage is averaged together. For Volkswagen, for example, the poor fuel economy of the Bugatti Veyron is offset by the excellent fuel economy from the Volkswagen e-Golf.
For FCA, Fiat easily offsets the poor Ferrari fuel economy with little cars like the 500, Punto, and Panda. As a completely separate entity, we would assume the CAFE number would drop significantly. How will that affect the company in the future? We aren’t sure. But the turbo V8 in the California isn’t going to be enough to get those fuel economy numbers up.
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