so much for the Dodge Circuit and Chrysler 200C

Chrysler dismantles electric car plans under Fiat

November 7, 2009 - 12:01 am ET

DETROIT (Reuters) -- Chrysler Group has disbanded a team of engineers
dedicated to rushing a range of electric vehicles to showrooms and dropped
ambitious sales targets for battery-powered cars set as it was sliding
toward bankruptcy and seeking government aid. The move by controlling
shareholder Fiat S.p.A. marks a major reversal for Chrysler, which had used
its electric car program as part of the case for a $12.5 billion federal aid
package.

As late as August, Chrysler took $70 million in grants from the U.S.
Department of Energy to develop a test fleet of 220 hybrid pickup trucks and
minivans, vehicles now scrapped in the sweeping turnaround plan for Chrysler
announced this week by Fiat CEO Sergio Marchionne.

Chrysler spokesman Nick Cappa said on Friday that an in-house team of
electric car development engineers had been disbanded in favor of a more
traditional organization.

The automaker's former owner, Cerberus Capital Management, had set up
a special division called "Envi" -- derived from Environment -- to spearhead
development of hybrid technology where Chrysler badly trailed competitors.

"Envi is absorbed into the normal vehicle development program," Cappa
told Reuters.

Under mounting pressure to improve the fuel-efficiency of its lineup,
Chrysler announced in September last year that it was developing three
electric vehicles and would sell the first of the models by 2010.

In January at the Detroit auto show, Chrysler upped the ante on its
electric car bet by pledging to have 500,000 battery-powered vehicles on the
road by 2013, including sports cars and trucks.

Change of plans

But a presentation of Chrysler's five-year strategy by Marchionne on
Wednesday made no mention of Chrysler's earlier electric car development
plans.

Under the Marchionne plan, former Envi chief Lou Rhodes will become
the group line executive in charge of electric car development for both Fiat
and Chrysler, Cappa said.

As of Friday, the Chrysler Group Web site still featured pictures and
advertisements for the now-scuttled electric vehicles it had been
developing.

That includes the Dodge Circuit, a two-seat, all-electric sports car
that Chrysler engineers had rushed into prototype by using a Lotus platform.

At the time of the launch of Envi in late 2007, Chrysler executives
had said the unit would operate with the speed of a venture capital-backed
start-up that would compress the three-to-five-year development cycle
typical for automakers.

Chrysler is the only one of the six top-selling automakers in the U.S.
market without a hybrid offering.

FIat CEO sees 'struggle' for EVs

Marchionne told reporters and analysts that electric cars would only
represent "1 to 2 percent" of Chrysler's sales by 2014, equivalent to less
than 60,000 vehicles.

"Until the (battery) storage gets resolved, I think electric vehicles
are going to struggle," he said.

Fiat is considering bringing a battery-powered commercial van to the
U.S. market but those plans have not been finalized, other Chrysler
executives said.

The Obama administration, which has set a target of putting 1 million
rechargeable cars on the road by 2015, gave Fiat a 20 percent stake in
Chrysler in exchange for bringing vehicles and more fuel-efficient engines
to Chrysler.

Marchionne has forecast that Chrysler will be at breakeven on a net
basis in 2011. The automaker has said it plans to more than double U.S.
sales over the next five years and roll out a dozen new models based on Fiat
platforms.

 

So the electric cars were a sales tool used on Obama?
Not good.

Chrysler stands out in not having a hybrid.

Obviously they are concentrating on Fiat's technology.
I hope they're right !