Chrysler LLC can't rely upon its planned alliance with Fiat SpA to meet new U.S. fuel economy standards and must continue to develop electric and hybrid vehicles, executives said.
Access to Fiat small-car technology won't be enough for Auburn Hills, Michigan-based Chrysler to achieve targets set by President Barack Obama's administration, said Bob Lee, the automaker's vice president of powertrains.
"We need electrified vehicles in our plan to meet those regulations," said Lee, in an interview last week. "If I add a bunch of 38-mile-per-gallon vehicles it doesn't get us to where we need to go."
The new government standards dictate that vehicles -- even trucks and SUVs -- improve their fuel economy. Chrysler, the maker of the Jeep Wrangler and Chrysler Town & Country minivan, aims to meet the goals partly through the introduction of large hybrid models and the use of electric powertrains.
A group led by Fiat SpA wants to purchase the best assets of Chrysler to create a new U.S. automaker owned partly by the Turin, Italy-based company, along with the U.S., Canada and a United Auto Workers union retiree health care trust fund. The purchase is now tied up in court amid creditors' objections.
Chrysler introduced two hybrid vehicles last year -- versions of the Dodge Durango and Chrysler Aspen sport-utility vehicles -- playing catch-up to competitors including Toyota Motor Corp., which has offered gasoline-electric vehicles for more than a decade. Chrysler aims to make up for lost time with electric vehicles featuring on-board gasoline generators that extend their range.
Electric Goals
Company executives in January said they intend to have 500,000 electric vehicles on the road by 2013. Chrysler plans to sell its first electric vehicle at the end of next year. The company hasn't said what it will be, though it could be a Jeep Patriot, Wrangler, Chrysler Town & Country minivan or a Dodge Circuit sports car based on a Lotus.
Plans for developing a fleet of all-electric, plug-in electric and range-extended electric vehicles hasn't changed in light of the pending merger with Fiat, said Lou Rhodes, who leads Chrysler's electric vehicle team, in an interview yesterday.
Some observers wonder how big a price tag such developments will carry.
"How much is it going to cost? That's the kicker," said Aaron Bragman, a product analyst with IHS Global Insight Inc. in Troy, Michigan. "If you have a 50-mile-per gallon minivan or one that doesn't use a drop of gas, that's a big advantage. But how much does it cost?"
U.S. Regulations
Obama has said that the combined U.S. fleet of automakers' vehicles must meet a 35.5 mile (57.1 kilometers) per gallon standard by 2016, four years earlier than planned. Standards also will be set based on vehicle attributes, such size and weight.
Chrysler's test electric-hybrid vehicles can already meet previously stated performance targets of 40 miles range on an initial charge, Rhodes said. After the first 40 miles, a gas generator kicks on and recharges the battery. The idea is that most Americans drive less than 40 miles a day, and the vehicles likely would rarely need to be refueled if they are plugged in overnight at home.
"We are hitting all of our targets," Rhodes said.
