Chrysler-Fiat won't invest in EVs until pricing improves, exec says

Chrysler and Fiat will not invest in electrified powertrains until consumers are willing to step up and pay for the technology, said Bob Lee, head of Fiat and Chrysler global Powertrain.

Instead, Lee said, Chrysler and Fiat will broaden their North American lineup with more diesels and downsized, turbocharged gasoline engines.

Speaking at the 2013 CAR Management Briefing's Advanced Powertrain Forum here this morning, Lee said consumers don't value hybrids and other electrified vehicles enough to pay for the added cost of battery packs, electric motors and chargers.

"Many customers want to reduce C02, but they aren't willing to change their lifestyle or pay the cost -- yet," he said. That might not happen for another decade, he said.

Diesels and smaller, more powerful turbocharged gasoline engines are the fastest ways Chrysler can improve the fuel economy of its fleet. Chrysler and Fiat do not have a hybrid powertrain and offer only one electrified model in North America, the Fiat 500e sold only in California for the same price as a gas-powered Fiat 500.

When Fiat took over Chrysler, it brought with it an array of diesel engines already in use globally in a variety Fiat brands sold around the world.

Chrysler is just now launching a new 3.0-liter V6 turbo diesel in the Grand Cherokee with an EPA rating of 22 city/ 30 highway for two-wheel drive models. The engine produces 420 pounds-feet of torque and 240 horsepower. "We think this is going to be a big product for us," he said.

Two other diesels are coming this year. The Ram ProMaster cargo van arriving this summer will be available with an optional 3.0-liter four-cylinder turbo diesel engine. The Ram 1500 pickup due late this fall will be available with the same 3.0-liter V-6 diesel as the Grand Cherokee.

Diesels and hybrids deliver roughly the same fuel economy gain over gasoline engines, between 20 and 30 percent on most vehicles. But diesels offer better performance, which Lee thinks gives the engine an advantage over hybrids.

In addition, adding more diesel engines, Lee said Chrysler and Fiat will continue to wring out more efficiency by redesigning and improving the parts of the vehicle that are most energy inefficient.

One recent innovation, Lee said, is the four-wheel drive system on the Grand Cherokee. When it is disengaged, the transfer case and rear driveshaft are decoupled from the transmissions and do not spin. That improves fuel economy by about 2 percent, he said.