By on November 10, 2009

Vaporwhere? Nowhere.

There’s a backlash a brewing over Chrysler’s decision to axe its EV and hybrid program. The move makes sense from an business point-of-view; the company doesn’t have enough money to chase sky pie. Politically, it’s all kind of nuts. Lest we forget—and even the normally automotively absent-minded USA Today doesn’t—ChryCo trotted-out alt power vehicles to secure some $12.5 billion (plus) in federal bailout bucks. And while the zombie car company will import the fuel-efficient Fiat 500 to trigger a hidden-at-the-time clause which surrenders more ChryCo control to Fiat upon selling a new, high mileage vehicle in the U.S., that precious little jewel is NOT what the democratic party’s four-wheeled-oriented tree huggers had in mind. Surely pretending to continue develop the battery-powered vaporware would have been the better bet. That way, when Chrysler returns to the federal trough, they could have played the green card. Now? Fuhgeddaboutit. Which only leaves the jobs card, vs. popular sentiment against more bailout bucks. Methinks the move to kill the ENVI program means that Chrysler is doomederer than before. You?

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55 Comments on “Ask the Best and Brightest: Did Chrysler Seal its Fate by Killing EVs?...”

  • avatar

    I thought GM got all the credit for killing EVs.

  • avatar
    John Horner

    This was a smart move. Chrysler needs to put its meager resources behind things which have a chance of selling profitably in volume over the next several years.

  • avatar

    Chrysler did the right thing. Electric makes no sense at this time, or even for the foreseeable future. If there is a breakthrough in battery technology, they can get back in the game at that time.

  • avatar

    Did anyone seriously think they were going to do these cars?

  • avatar

    Chrysler can conserve far more resources (both it’s own and nature’s) by using Fiat diesels or multiair where practical application allows.  Good for them.

  • avatar
    Buddha Belly

    It may be a smart move and may make business sense to kill the program, but the PR value would have been huge.  Remember, the majority of the American driving public is all about perception.  How else to you explain the Hummer H2 popularity a few years ago?

  • avatar

    Right now, if it isn’t a Prius, it’s nothing. Chryco hasn’t lost much. Until gas goes back up there’s not much besides PR value and that’s not a big thing either.

    Watch GM try to wiggle out of the Volt fiasco.

  • avatar

    Who cares? Chrysler is a dead end.

  • avatar

    The ENVI program was a scam from start to finish. It was a tailor-made greenwash to get bailout bucks, and that’s all there was to it. Anyone who believes otherwise is profoundly deluded.

    • 0 avatar

      I second this motive that Chrysler who had the Aspen Hybrid all of  a sudden had 5 EVs ready to show the US gov’t that they’d build.  As soon as the funds when to them all we saw was some more photoshoots of these cars.  Once Fiat bought them from CH11 we never heard from them again.  This was all a facade to get the green bailout bucks.

  • avatar
    Gardiner Westbound

    The only people fooled by Chrysler’s EV program were the civil servants. How hard is that?

  • avatar

    It’s a case of damned if you do, damned if you don’t. No one would have been fooled by a token commitment to ENVI, and the business world would have pointed out the folly of pursuing very long-term technology when the company is gasping for air today. If EVs hadn’t been scrapped, wouldn’t this topic be about Fiat’s hybrid envi instead?

  • avatar

    Customers want value, whether it’s for pure economics (Fiat 500), performance (Viper), utility (Caravan, Ram trucks), or style (Challenger).
    EVs don’t compute in the value formula, and hybrids are iffy.  Chrysler/Fiat made the right call.  They can still receive US government welfare based upon the jobs thing, and the possible importation of Fiat’s clean diesels.

  • avatar
    Mr Carpenter

    I agree with everyone thus far, in that Chrysler should not be tossing money away on blue sky Bullshit like EV’s when they can’t even manage to collaborate with Getrag (or was it ZF?) on a DSG transmission plant in the USA. 

    Funnily enough, when I read the news about Chrysler killing ENVI, it seemed to me that they were saying that they were putting the ENVI personnel back into the mainstream of the automotive development – which I took to mean that ENVI was now “mainstream” development instead of “special pie in the sky for later” development.

    I truly read that wrong, apparently. 

  • avatar
    Mark MacInnis

    RF…you already know how I feel about it….the people responsible for putting the EV’s in their “plan for the future” back in March should be prosecuted for fraud, perjury and contempt of the American taxpayer…..they NEVER EVER intended to make electric vehicles.  Moreover, they KNEW it at the time, knew it as they were testifying before congress in order to get their $12.5 Billion.

    If I called the IRS and told them,never mind, I decided I wasn’t going to make my tax payment next April 15th.  Take that coupla thousand bucks out of the savings from 
    what Chrysler ISN”T investing in electric vehicles, there would be jack-booted, balaclava-wearing, AR-15 toting fascists at my door to arrest me.  But blatantly LIE to Congress about BILLIONS of taxpayer dollars?  The soft, whispery sound is the complacent whispers of the complicit thieves we elected in DC……

    I can’t WAIT to hear the excuses from the members of congress who voted to give them the money…..oh, wait,  the MSM will never think to ask.  Nothing to see here.  Again.  Still. 

  • avatar

    Chrysler sealed its fate long ago, this is just a blip on the downward spiral that is Sebring, Patriot, Caliber, and I’m probably forgetting something else but that’s just how forgettable their product line is.

  • avatar

    I wouldn’t mind seeing that little yellow number come to market with the SRT-4 powertrain…

  • avatar

    Errrr…. Didn’t the business plan from last week use $1b/year from DET during 2010-12 ($3b)?
    So they have another revolutionary, research worthy tech coming then?

  • avatar

    Chrysler’s going to go the VW route and use diesels instead of hybrids/EVs. It’s better this way neither Chrysler or Fiat are know for their quality electrical sytems.
    I’d take a conventional ICE over either any day but I’d choose an EV over a diesel since I’d rather believe EV hype over Diesel hype

  • avatar

    Wrong, wrong, wrong. 

    It was never buried nor hidden that Fiat would obtain a greater percentage of Chrysler as they hit certain achievements, such as building a vehicle that gets more than 40 MPG. This was all over the news as they emerged from bankruptcy, as shown below at Bloomberg.

    Fiat took a 20 percent stake in the new company in exchange for sharing vehicle designs, engines and transmissions, something the U.S. company valued at as much as $10 billion.

    Fiat can get an additional 15 percent ownership of Chrysler by reaching performance milestones, such as building a fuel- efficient engine in the U.S.

    Also, the current owners of Chrysler were not the ones who “trotted-out alt power vehicles to secure some $12.5 billion (plus) in federal bailout bucks” That dubious distinction belongs to Cerberus, who got the boot when the government sought Fiat as a partner.

    Below one can clearly see that the government courted Chrysler’s current owners/managers, Fiat, for the tie-up.

    We did not believe we could underwrite its viability without a strong corporate partner, so we turned our attention to that single possibility, an overture from Fiat.

    After about an hour, the President asked for any final comments and then said, “I’ve decided. I’m prepared to support Chrysler if we can get the Fiat alliance done on terms that make sense to us.” And we were thrilled when the President said, “I want you to be tough, and I want you to be commercial.”

    Fiat never ever promised any electric, hybrid, or alike vehicles and the government knew about it.

    Fiat also brought its advanced products to the table — small, stylish cars and fuel-sipping engines, Rattner wrote.

    If anything, the taxpayers should be happy to see a management team at Chrysler telling the truth and not pumping a profit-killing program that will not help it pay the government back. They need to concentrate on the core and if feasible work on the fluff.

  • avatar

    The Administration doesn’t want green cars as much as it wants the resurrected automakers to get off the dole.

    Many people look at this through the political lens and there’s little justification for that.  We’ve got an economic crisis going; votes will follow success in alleviating it.  The Administration’s best plan is to simply do things that work or, in the case of the automakers, stem the bleeding.  Seeing GM and Chrysler go dark would have reduced consumer confidence and economic activity.

    • 0 avatar

      “Seeing GM and Chrysler go dark would have reduced consumer confidence and economic activity.”
      So, you believe 10.2% is a success?    I’d hate to see failure.

    • 0 avatar
      John Horner

      What do you think the unemployment rate would be RIGHT NOW if there had been no government interventions at all in the US or the rest of the world. No TARP, no stimulus package, GM, Chrysler, AIG and countless other companies simply shut down, no first time housing buyer stimulus (which by all accounts is the only thing keeping any floor under the housing market), and so on and so on. The TAKE YOUR MEDICINE PEOPLE approach was tried at the beginning of the Great Depression and the thing spiraled completely out of control.
      10.2% is bad. Does any thinking, informed person believe that number would be better if the government of the world had simply sat on their hands?

  • avatar

    “Surely pretending to continue develop the battery-powered vaporware would have been the better bet.”

    Well you said it and it’s true, the full on electric plan was vaporware so it’s conversion from vaporware to noware isn’t a loss or an obstacle. The hybrid program probably will be however. Hybrid technology is probably best described as an interim technology but it sells for now and fills a need. No idea what Chrysler Group LLC will do for its next trick without at least that going for them.

  • avatar

    When I saw the press release about the Wrangler getting the diesel, I was wondering if anyone would mention Chrysler’s prior EV plans. In that particular application, the CRD is probably a wiser (and, more importantly, cost-effective) move.

    It’s debatable whether the EV program might have been better in the long run, but given Chrysler’s (i.e., Fiat’s) shoe-string development budget, the alternative  (and cheaper-to-produce) CRD would be too good to pass up.

  • avatar

    Chrysler – An American Abomination
    I know the congress is bought already with the blood of 1000 children and my kid’s 529 plan, but can someone there please show some balls and take Chrysler out behind the shed and have it shot.
    Those claiming this is about jobs have it half right – those Chrysler jobs are gone… just not today.  In the meantime, it would benefit everyone else for the man in the boat with rickets, scurvy, swine flu and a raging case of herpes to be thrown out already.  Chrysler is a wasteland that would be best picked over for the talent it has, but can’t or won’t utilize.

  • avatar

    Sorry, but did ANYONE (outside of Washington DC and Motor Trend) really think Fiatsler was actually planning to build EV’s?

    These were mules trotted out to secure Federal bailout money, and nothing more. So when you think that each vehicle netted the company about $4Billion, that isn’t such a bad return on investment. 

    Well, for everyone except the taxpayers.

  • avatar

    Fiat is backing the Diesel horse in the great green car arms race.  If they can make a car comprable to the Jetta or Golf TDI without all of VWs know flaws great.

  • avatar

    I guess the sad part about this announcement is that Chrysler had to throw away a good 3 weeks worth of effort by a handful of engineers not quite qualified to develop such winners as the Sebring, Compass and Aspen.  That’s time they will never get back.
    But yeah, dumping ENVI does mean that Chrysler has one less excuse for existence.  If unemployment weren’t such an issue right now, they would be over and out by now.

    • 0 avatar

      Don’t belittle the engineers, who design only what their managers approve and pay for.  Personally, I’d buy a Compass if I was in the market for a low-cost, roomy AWD.

  • avatar

    It was a smart move, which in Chrysler’s sad state is probably just a happy accident.  Despite the hype there isn’t a strong market for EV’s,  the technology is not mature, and standardization for simple things like power connections are still in progress.   I’m thankful that Chrysler didn’t take a few hundred million just to give a Congressman some talking points.  As mentioned by other posters, they should stick to diesels and aim for higher efficiency. And if there comes a real demand in the future for EV’s, buy out or team up with an existing EV company that’s getting it right.

    It’s hard to tell at this point if Chrysler/Fiat are doing the right thing to get their collective house in order and aim at maintaining their market share, or if it’s an all too familiar story, similar to the too little to late endings of Packard, Studebaker or Rambler. 

  • avatar

    Will someone please read the press release before jumping to the WRONG conclusion???  All Chrysler did was elimiate ENVI as a stand alone department and merge it into the product lines.  They did not kill the EV, just the ENVI department !

    FROM TTAC:Fiat/Chrysler Walk Away From Electrification And Hybrids

    “ENVI is absorbed into the normal vehicle development program,” Chrysler spokesfolks confirm to Automotive News [sub]. “

    • 0 avatar
      Jeff Puthuff

      No, they killed the program and moved the engineers in it back into normal vehicle development. It’s in the article you linked and being reported by others!

      “The team of engineers that made up the ENVI has been disbanded by Chrysler’s new leaders and reabsorbed into the company’s normal vehicle development program.”

      Read more:

  • avatar

    Sorry. Chrysler jumped the shark with the K-car. No, wait, it was  “corinthian leather”  No, actually, it was the Dart…No, wait….
    You get my point.

  • avatar

    Call me crazy
    Call me conditioned..
    Call me a nay-sayer..
    But I saw this COMING from 10miles away.
    Ya dont actually think Chrysler is going to stick with something… and electric vehicles. These yahoos cant even put together a midsized compact without offering 1g on rebates the day it debuted!

  • avatar
    Extra Credit

    So true.  How could anyone that witnessed Chrysler’s display of “Electric Vehicles” at the last Detroit Auto Show honestly believe these things would ever exist.  If you’re going to call out every manufacturer on every half (or less) truth they’ve spilled in the past 16 months, it will be a few years before we see the next Curbside Classic.

    Getting closer to the original topic, killing ENVI did not make Chrysler more doomederer. The unfunded time required to replace their continuous flow of sub-par products is the icing on their doomederer cake.

  • avatar

    I too thought the Auto Show exhibit was really only for show.   However, the 200C EV was one of the nicest looking cars ive seen in a long time.  The EV part wasnt demonstrated , but the car itself was a real eyecatcher .  I would buy one in a heartbeat with a great FIAT turbodiesel and 6 speed.

  • avatar

    I don’t even know where to start regarding all your comments. Was it the right decision for Chrysler to kill the ENVI?  I think not, but I could be wrong. The reason I say that I could be wrong, P-O-L-I-T-I-C-S.  It is impossible to understand all the forces involved. However, lets look at this from every perspective important for their survival. ‘Fiasler’ needed a marathon press conference to go over their plan. Fiat needed to address the industry trends b/c the market is changing. Fiat needed to approach this from a financial perspective as well b/c both companies are strapped for cash with Chrysler market share disappearing more every quarter. Also, Fiat needed to create a perception that they are headed somewhere with exciting new product in development. Lastly, Fiat needed to address the “american jobs” factor in their plan.  There is more… but lets start with that.

    From a marketing perspective Chrysler needs a shot in the arm. The general public does not see Chrysler as a viable company. Sales are the best indicator of that. Chrysler’s numbers are declining across the board, even among freshened product. Even considering the overall NA vehicle market. Profit per unit is also on the decrease as incentives continue to hover in the $4,000 range. Chrysler will continue to see sales deteriorate on models that were never popular. Sebring, Avenger, Caliber/Compass/patriot/Nitro, Commander, Aspen/Durango. Sales will also decline on the popular/older models that need refreshing 300, PT and charger. The public also sees Chrysler as the least reliable american company. Fiat also has a bad image in America, and they won’t see that change any time soon. How do you fix these built in problems? RE-INVENTION. They won’t be able to do that if they chug along providing decent product in a very competitive market. “If your not first, your last.” -Ricky Bobby
    Financially, Fiat isn’t being very realistic when it says that it will make 3 million in profit within 3 years. Further, they see a market of 14 million vehicles in 2013-2014.  I see this as a bit optimistic, and they seem to have their heads in the clouds about the future. What do they have in their future that is going to make the company money? The 300 is not going to be a remarkable product. It will be no better than the current avenger. Where are they going to get money to overhaul its product line? Fiat doesn’t have the money and I don’t think Chrysler does either. Oh sure they have money now, but what about 2 years from now. I honestly believe they don’t understand the american market and Fiat will not feed the” Chrysler monster” for very long. Fiat will milk the dealer network here and launch the Fiat’s for their benefit only. Look at Daimler, they thought they had a great company…. and then they sold if for pennies. Cerebus thought they had a viable company…. and then they sold it for pennies.
    Fiasler says they are going to re-vamp all their product within a few years. Fiat says they are going to change motors as inital steps.  How does this affect the perception by the consumer? It doesn’t do anything remarkable for the company. They need dynamic product, and they won’t get it. Sergio mentions that he sees Fiat as creators of iconic products and he sees this in Chrysler. Yea, maybe at one time, but times have changed. The 300 won’t ever return to glory, Chrysler never has and never will have a great selling mid-size car and the Fiat is the small car of Fiats future, not Chrysler’s.  The Dodge truck will never regain the #3 spot on the sales charts. And unless they can improve mileage, the Town and Country will only see LIMITED SUCCESS. What else do they have that will OOO and AAAAHH the public. The Viper is dying, the Charger and Challenger represents everything that is the past about Dodge and the Dakota and Durango are dead dead dead! They’ve got a few products that will keep them from dying a fast death. Jeep, is pretty strong, even though 3 products suck (Command, pat, compass).  How far can the Wrangler carry Chrysler? The public has no reason to get behind Chrysler because their only product worth a damn represents a dying past instead of profitable future.
    The american public could get behind Chrysler if it saw them as an American company creating american cars assembled primarily on american soil. Instead, they are going to keep or enhance production in Canada and Mexico while closing plants in the United States.
    One more thing, many of you have praised Fiat for making the decision to kill the electric car development, and along the way criticizing GM for pushing the Volt. While I tend to agree with you regarding batteries…… I must disagree based on desperate need by this country to re-invent themselves. Ford has done well recently b/c the public perceives them as a forward thinking and doing company. The Fusion and escape hybrid are good marketing plays by Ford. Hybrids and range extenders may not be the whole answer for the world, they do represent the future… something Fiat hasn’t thought much about.

    What are Chrysler’s marketing plays?  I’ve seen some commercials, they are appealing to emotion to sell cars. This will not effective b/c the public does not trust this two timing whore of a company. Period.

  • avatar

    Killing the EV (if it was ever alive) was probably one of the smarter things Chrysler has done in the last 15 years. I don’t see battery electrics being more than niche for 20-30 years. And even the Prius is an expensive way to save on co2 emissions relative to various strategies on conventional ICE, according to McKinsey, a consulting firm taht’s advising everyone in this country on greenhouse gas mitigation strategy.
    This whole hybrid worship drives me crazy. You want high mileage? don’t dictate the technology. Just take it where-ever you can get it as inexpensively as possible. You worship hybrid and you just might foreclose something better.

  • avatar
    Martin Schwoerer

    Ghosn is betting that electric is viable, and that first-to-market creates a competitive advantage.
    Marchionne is betting that there is no advantage in being early to market with electric technology, and that the crucial stuff will be available off the shelf in a few years.
    I think Ghosn is a bit ambitious but that Marchionne is naive if he thinks he can just join the EV bandwagon in a decade or so. The EV business will be about branding and software — two things you won’t be able to buy from suppliers. On the other hand, Marchionne has to conserve scarce resources, so I’m not surprised he’s killing everything he doesn’t need in a short-term time frame.

  • avatar

    Chrysler has only sealed its fate by dropping EVs if you count Obamabucks as a core source of revenue.   And yes, that might be the case.   But from a purely capitalist (and taxpayer’s) standpoint, I applaud Chrysler’s decision.   EVs are an expensive, high-risk niche for financially-secure automakers only.

  • avatar
    Rod Panhard

    It’s just another small anecdote about Chrysler’s zombie-esque pirouette into grave. Nothing to see here folks. Move along now…

  • avatar

    How many of these things did you all think they were going to sell? How many $50,000 Wranglers? $40,000 Town and Countrys? It was a waste to begin with for a company in their situation.
    Yes, public perception is important but I don’t think that has much to do with hybrids.  No one holds it against VW because they make cars that get decent mileage and look pretty good on the inside and out. Chrysler will try to go the same route.  Toyota is the hybrid maker of choice, with Ford to some extent in a distant second with the Escape and Fusion. Chrysler is in no position to take either company on in that capacity. Consistent cash flow is their concern right now.

  • avatar
    Mark MacInnis

    You guys can use weasel words and call it a good business decision all you want…..but they KNEW at the time they were never gonna pull this EV thing off.  Lied about it to congress to save their sorry-ass company.  Fraud is fraud is fraud.  Or are you all teaching your kids that it is OKAY to lie in order to save your company and your job?

    Moral relativism lives. 


    • 0 avatar

      “but they KNEW at the time they were never gonna pull this EV thing off.”

      Mark; read my comments above.     


      The current Corporation is NOT the old “Cerberus Owned” one.
      The current corporation is a 20% Fiat Owned and Managed Company.
      The current corporation never lied to congress.

  • avatar

    John Horner: The TAKE YOUR MEDICINE PEOPLE approach was tried at the beginning of the Great Depression and the thing spiraled completely out of control.

    The idea that the Hoover Administration took a laissez-faire approach to the economic downturn in the wake of the stock market crash of 1929 is a myth. President Hoover pushed for public works projects and even formed the Reconstruction Finance Corporation to assist failing companies. 

    It wasn’t the Hoover Administration’ s mindless pursuit of laissez-faire economics that turned what should have been a short and sharp recession into the Great Depression. It was the Federal Reserve Board’s fear of inflation when the problem was deflation (which resulted in severely restricted credit), along with the passage of the draconian Hawley Smoot tariff that killed the economy.

    Unfortunately, in some cases, President Roosevelt either continued the Hoover Administration’s bad practices, or actually made things worse.

    Government actions caused the Great Depression, not the natural workings of the free market.

    John Horner: a 10.2% is bad. Does any thinking, informed person believe that number would be better if the government of the world had simply sat on their hands?

    I don’t know about thinking, informed people, but some of us with memories that stretch beyond the day before yesterday remember the Obama Administration saying that his stimulus plan would ensure that unemployment figures would never reach this point if it was passed.  

  • avatar

    Fiats powertrain guy was convincing.  25% improvement in fleet fuel economy by2014.
    1. Fiat diesels. ( will also set them apart from the competition)
    2. Fiat Multiair  tech. added on to many of the gas engines.
    3. All current V-6’s get replaced by the Phoenix V-6 family.
    4. Fiat 4 cylinder starting with the 500 vehicle.

    This will green things up way more than a lame attempt at electrics.
    Go Chrysler Fiat.

  • avatar

    Lied about it to congress to save their sorry-ass company.  Fraud is fraud is fraud.

    Congress had nothing to do with saving thier sorry ass, congress didn’t give them a penny (In case you don’t remember they voted not to give aid to GM and ChryCo).  They were saved by TARP (with which congress ceded all control so they could cover thier own sorry ass) and and I don’t recall them saying anything about electric vehicles in regard to that aid, Fiat wasn’t so dumb as to promise anything like that.  ChryCo said that electric vehicles were in thier future to secure loans authorized by Congress, Congress never authorized any loans, so ChryCo never had any reason to go forward with it.

  • avatar

    Reading those comments in the USA Today article makes my brain hurt. Obama bashing, that Who Killed The Electric Car “documentary”, calls to call the loans… my God…

  • avatar

    Whether or it was “smart” or not, they didn’t have a choice. They have to turn a profit (at some point that will become necessary for all the american car companies again, I would think), and no one is going to make a profit on electrics for years after they’re introduced.  They’d be smarter to right size themselves down just to live on the profit they actually make off of RAMS and Jeeps, even at a reduced volume. And then grow from there a segment at a time.

    I actually think Hyundai is going to be the biggest player in the low end of the market, eclipsing Chevrolet and Dodge. They’ve predominantly closed the quality gap with the Japanese, are aggressively priced, and pretty nicely appointed. They’ve come a long, long way in a relatively short amount of time. It’s the same pattern, over and over. Hyundai is just following the map that Honda and Toyota did in the 70’s-90’s. Start small, focus on low cost quality, retain customers, offer a broader array of vehicles. The new Genesis, both 4 door luxury sedan and 2 door coupe show how successfully they’ve navigated their ascent.  It’s sad that the American companies struggle over and over to compete. Hyundai doesn’t have any electrics in it’s hopper, to my knowledge, and I’d invest in them before I’d invest in Chrysler.

  • avatar

    The Korean cars have a LONG way to go b4 they are going to be considered one of the top automakers in the world. However, i see many parallels in the demographics between wal mart shoppers and Kia/hyundumn owner……….
    SHORT-TERM STRATEGY….. gets you where in 10 years????
    however, cars a more personal expression and therefore their market penetration will not reach as far as wally worlds’ has.
    Ask any car dealer…. Most of them won’t touch a Hyundai or Kia with a 10 foot pole. PERIOD!

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