Chrysler (Fiat) Breaks Pledge on Electric Cars

Submitted by Steve Horn on

electric vehicle charging stationReuters recently reported that Chrysler's new foreign owner, Fiat, has disbanded its "Envi" environmental division "dedicated to rushing a range of electric vehicles to showrooms." This "marks a major reversal for Chrysler, which had used its  as part of the case for a $12.5 billion federal aid package."

Indeed, a pledge to become more innovative and make electric cars more readily available to consumers was a major part of the case for taxpayer assistance that then-CEO Robert Nardelli made to the US House Committee on Financial Services in his testimony on behalf of Chrysler on November 18, 2008 and December 4, 2008. For example, in his December statement, Nardelli said, ". . . we expect that 500,000 Chrysler electric-drive vehicles will be on the road by 2013." And, in a December 15, 2008 interview with CNN Money, Lou Rhodes, Chrysler's Vice President for Advanced Vehicle Engineering, insisted that "electric cars aren't just a side-show or a public relations move for Chrysler, but a major strategic move."

Those statements were part of Chrysler's push for the Auto Industry Financing and Restructuring Act of 2008, which would have provided $14 billion in emergency loans to the Big Three automakers; the bill passed the House, but was filibustered by Senate Republicans in December 2008. Despite the inability to overcome a filibuster of this bailout plan, the Obama administration sought to aid the industry in other ways, including by awarding a $70 million grant as part of the American Recovery and Investment Act of 2009 to develop hybrid electric trucks and minivans, as part of the administration's commitment to electric vehicles and energy independence under its green economy plan.

Fiat has scrubbed Chrysler's electric car programDespite these investments and Chrysler's prior promises, its new foreign owner, Fiat (which purchased the company's assets and debt after Chrysler filed for Chapter 11 bankruptcy protection), has fired the company's Envi brain trust, and now FIat's CEO, Sergio Marchionne, says "I do not believe much in EVs and I think that electric cars would represent just one or two per cent of Chrysler`s sales by 2014" (or roughly 60,000 cars), a far cry from the half a million originally pledged. But Fiat did decide to keep Chrysler VP Lou Rhodes on to oversee its meager "commitment" to EV, saving at least one American (executive's) job.

So, Fiat broke Chrysler's promise to the American people, but why would the Italian automaker care about American taxpayers or building a green economy in the states? Just one more reason to question the bailout of companies rather than American workers themselves.

News article by Steve Horn, a new intern with CMD, who is majoring in political science and legal studies at the University of Wisconsin in Madison.

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Comments

Kimm replied on

Things don't look too good for Chrysler, it's too bad the brand is going down, there already people that miss it. The new boss isn't willing to cope with the former Chrysler strategies, I think Fiat should reconsider these strategies that were meant to promote and sale electric cars, these cars are on high demand today. Kim

andrews replied on

I believe Chrysler was going in the right direction by focusing on the electric cars more than ever, it's such a waste that the new Italian owner of the company has no intention to continue this strategy. They should reconsider it, electric cars are at high demand these days and from my point of view it's the only way for the auto industry to recover.

Regg replied on

"Envi" environmental division? We can't argue about that can we? I still be believe in Chrysler, I always did and I hope Fiat will come to believe in it too. My first car was a Chrysler and I had no troubles in finding an affordable for my student pockets. Chrysler puts an emphasis on safety features.

andymish replied on

This is really quite bad for Chrysler. I don't kinda get it why they want to shut down or lower the production of electric cars especially that the automotive market now is full of electric cars produced by other car companies. There are still some people who may want to purchase Chrysler because of it's elegant car that has sleek body, <a href="http://www.car-stuff.com/koolvuebrand.htm" rel="dofollow" style="color:black;text-decoration:none;weight:normal;">kool vue</a> parts, stylish interior and much more that consumers are desiring for. So they shouldn't lose hope in the battle. I think they should still continue the production of electric cars because this is what is in demand in the automotive market.

Elij replied on

I don't get the reasons why Chrysler should stop the production of electric cars especially that now is the time of high peak demand of electric cars. On top of that, this would also be a good chance for Chrysler to recover some profit in expense of their bankruptcy. Well, I have to admit that Chrysler cars are quite high in terms of price so I think what they should plan is lower the cost of their cars by eliminating some parts such high-tech GPS, shiny <a href="http://www.car-stuff.com/sidemarker.htm" rel="dofollow" style="color:black;text-decoration:none;weight:normal;">side marker</a>, or just by lowering the materials of the car so that many consumers could afford their cars. I hope they should reconsider about this move.