Fiat Terminates Chrysler's All-Electric Car Plans - What's Going to Happen to the $73 Million Gov. Grants for the EV Test Fleet?

Just over a year ago, the Chrysler Group's newly formed Envi division unveiled a series of production-based electric cars that it planned to put on sale. Fast forward a few months, Chrysler went in and out of bankruptcy, sealed a deal with the Fiat Group and then, in August 2009 under the leadership of its new CEO, Sergio Marchionne, secured a $73 million grant from the Obama administration for the manufacturing of 220 plug-in hybrid and electric pickup trucks and minivans in St. Louis and in Michigan. Well, guess what;

According to a news report from Reuters, as part of the Marchione's recently announced five-year business plan to revitalize the Chrysler Group, Fiat has pulled the plug on the automaker's Envi division as well as the development of the test fleet for which it had received the government grant.

Chrysler spokesman Nick Cappa told Reuters on Friday that Envi, which was responsible for the EV range, will be absorbed in the normal vehicle development program and its former chief Lou Rhodes will head an electric car division for both Fiat and Chrysler.

The group's CEO Sergio Marchionne told reporters that for the time being and with the current technology available, he doesn't believe much in EVs and that electric cars would represent just "one or two per cent" (less than 60,000 vehicles) of Chrysler's sales by 2014.

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

As of yet, there's no official word from Chrysler, but if the report from Reuters concerning the part about the scrapping of the 220 plug-in hybrids turns out to be true, one should wonder what's going to (or what should) happen to the $73 million grant that the automaker received. Post your thoughts in the comment section below.

Via: Reuters

Chrysler Group's Sales Numbers are More Confident than they Should Be

Despite all the negative publicity, it seems that Americans would still rather be driving a Toyota than a Chrysler product. According to Edmunds, Chrysler's consumer sales are down a HUGE 44% this year, versus Toyota's 14% drop.

Anyone quoting a 3% drop by Chrysler is factoring in fleet sales, and that isn't exactly fair. However, a Chrysler spokesperson says, "Fleet is part our businesses strategy...We have to rebuild consumers' confidence in the company...The fact that large companies are willing to buy our vehicles helps rebuild that confidence." Hopefully.

Here's what you can learn from some industry analysts:

Jesse Toprak, TrueCar: "You cannot viably survive with fleet and rental sales over 50%...The math just doesn't work."

Erich Merkle, President, Autoconomy.com: "The fact that [Chrysler's] losing share on the pickup side, it says to me that this goes beyond the product itself...I think Chrysler in the near term will be at the mercy of the market. They'll continue to lose market share, but they've got to hope that a rising tide will lift all boats."

Jeff Schuster, J.D. Power & Associates: "It really is survival mode for the next 18 months until they see product in the showroom...They're not finished with the turnaround yet. This is not something that can happen overnight."

If the Pentastar's lineup over the next couple years ends up being as promising as it looks, perhaps Chrysler won't have to keep leaning on fleet sales like an old man with a cane.

Maybe then, finally, we'll have a chance to see some legitimate, luxurious Chrysler compacts and small, sporty Dodges. And what if they try to pull another Sebring or Compass? I can't speak for anyone else here, but if that happens, take it easy guys. No tears shed on this side of the table.

Chrysler Group's 2011MY Lineup: 8 Redesigns, 7 Face Lifts, and a Fiat 500

In what's probably the least-shocking news of the day, Chrysler is working hard to bring its product line up date. Specifically, fifteen vehicles are being "reworked", eight of those "being redesigned or re-engineered".

Automotive News indicates that Chrysler is looking to get its vehicle portfolio up to snuff for Fiat's upcoming product merger.

This means that Chrysler will be throwing its new V6 into just about anything with wheels while redesigning, re-engineering, and renaming just about all of its vehicles (while also making use of a Fiat-developed dual-clutch transmission... about time, guys).

So, what do we know? The Sebring name is being dropped; Chrysler CEO Sergio Marchionne considers the changes "extensive" enough to call it a new model (this is good news). Also, it will be the first vehicle to come with the DCT from Fiat.

Then, beginning with Jeep's 2011 Grand Cherokee, we see the real-world application of the new V6. While the Jeep's V6 doesn't feature direct injection, Chrysler's 5-year plan indicates a few different variants including 3.0, 3.3, and 3.6 liter displacements, along with direct injection and turbocharging. Very good news. Also, Jeep's overseas, diesel-equipped Wranglers will gain start/stop technology.

Last but certainly not least, Fiat's long-anticipated 500 mini that will be sold through Chrysler dealerships starting from the fourth quarter of the year.

Refreshed models debuting this year:

• Jeep Liberty ("styling tweaks" ; Q1 2010)
  
• Jeep Wrangler (start/stop for overseas diesels in Q3 2010 ; Pentastar V6 in 2011)
  
• Jeep Patriot (face lift ; Q3 2010)
  
• Jeep Compass (face lift ; Q4 2010)
  
• Dodge Avenger (face lift ; Pentastar V6 ; suspension/interior upgrades ; Q4 2010)
  
• Dodge Grand Caravan (face lift ; Pentastar V6 ; new interior ; Q4 2010)
  
• Dodge Journey (face lift ; pentastar V6 ; new interior ; Q4 2010)
  

If anyone can think of a good name for Chrysler's replacemo-Sebring, throw it down in the comments below.