Chrysler Ends ENVI Electric Car Program

In late 2007, Chrysler took a serious stand and decided it had to star research for building electric vehicles. Cerberus Capital Management set up a special division called "Envi" - derived from Environment - to spearhead development of hybrid technology.

As a response to the increasing pressure to improve fuel efficiency, Chrysler announced in September last year that it was developing three electric vehicles and would sell the first of the models by 2010.

This was followed by the statement in January at the Detroit Auto Show, when Chrysler upped the ante on its electric car bet by pledging to have 500,000 battery-powered vehicles on the road by 2013, including sports cars and trucks. This strategy was also a part of the presentation that got Chrysler a $12.5 billion.

But now everything changed, as Chrysler and Fiat decided to give up this strategy. Chrysler spokesman announced that a team of electric car development engineers has been disbanded in favor of a more traditional organization. Which means that Chrysler finally decided to cut funds "until the battery storage gets resolved, I think electric vehicles are going to struggle," said Cappa. “Envi is absorbed into the normal vehicle development program,” he said.

Fiat and Chrysler CEO Marchionne told reporters and analysts that electric cars would only represent "1 to 2 percent" of Chrysler's sales by 2014, equivalent to less than 60,000 vehicles. The Obama administration wants 1 million electric cars by 2015, so it gave Fiat 20 percent stake in Chrysler in exchange for bringing EVs and fuel-efficient engines to Chrysler.