Chrysler Goes Electric

Chrysler says it will have an electric car on the market for 2010 as it angles for its share of $25 billion in government-backed loans

By David Kiley

Watch the Video…

Chrysler, which for months has been fending off chatter that it is only financially treading water until it can be sold to a foreign automaker, unveiled three electric vehicles on Tuesday, the first of which the company says will be offered to consumers in 2010.

Chrysler's announcement and unveiling comes a week after General Motors (GM) showed the production version of its Volt extended-range electric vehicle (BusinessWeek.com, 9/16/08), and on a day when lawmakers in Washington are deliberating whether or not to grant Detroit automakers up to $25 billion in government-backed loans.

Chrysler has been coy about its electric vehicle plans, while GM has been promoting its Volt project for 20 months. And some analysts and many in the media doubted that Chrysler, which was bought by Cerberus Capital Management in August 2007, had the resources to develop state-of-the-art electric vehicles. "We have a social responsibility to our consumers to deliver environmentally friendly, fuel-efficient, advanced electric vehicles, and our intention is to meet that responsibility quickly and more broadly than any other automobile manufacturer," said CEO Bob Nardelli.

21st-Century Cars

Chrysler, like other automakers, needs to develop more fuel-efficient vehicles in order to meet stiffer fuel-economy regulations that kick in in 2015 and get tougher by 2020. It also needs to show Washington lawmakers that it is spending resources to bring 21st-century cars to market.

Congress this week is deliberating over whether to grant carmakers and suppliers a $25 billion loan package to help see the companies through 2009. It's also discussing the language of the legislation that will grant the loans based on automakers making a specific commitment to bringing more fuel-efficient vehicles with smaller carbon footprints to U.S. driveways. Automakers sought $50 billion in loans, and are expected to lobby a new Administration in 2009 for the rest.

Chrysler showed four new electric vehicles: two extended-range electric vehicles that have gas-fed generators to feed electricity to the car when a 40-mile-range battery wears down; an all-electric sports car with a range of 150-200 miles; and a four-door neighborhood-electric-vehicle, which can be used in retirement and closed communities and on streets with speed limits of 25 mph or less.

Chrysler put an extended-range electric system into a Chrysler Town & Country (BusinessWeek.com, 11/21/07) minivan and Jeep Wrangler (BusinessWeek.com, 9/7/07) four-door, rather than developing whole new vehicles around the system as GM did with the Volt. "We felt it was smarter to spend our resources on the battery technology and integration of the systems instead of a whole new vehicle platform," said Vice-Chairman Tom Lasorda. Each vehicle contains a lithium-ion battery, which will take the occupants about 40 miles on an electric charge. After the battery wears down, a gas-power generator moves energy to turn the wheels. Batteries can be charged on household current. The system works similarly to GM's Chevy Volt, which will start selling in late 2010.