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Chrysler Abandons Electric Vehicle Program After Pocketing Taxpayer Bailout

By November 13, 2009

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During the federal government's bailout of the auto industry earlier this year, Chrysler Corporation received $15.3 billion in taxpayer money to keep its factories humming--partly in exchange for the company's aggressive plan to produce a fleet of electric vehicles. Now that the money is safely in the Chrysler coffers, however, the automaker has announced a new plan to disband its electric vehicle team and to produce only a token number of electric cars.

In testifying before the Senate Banking Committee in December 2008 while asking for the massive bailout, Chrysler's then-CEO Bob Nardelli told Congress: "A key feature of Chrysler's future is our capability as an electric vehicle company" and "we expect that 500,000 Chrysler electric-drive vehicles will be on the road by 2013."

But that was then, and this is now. In the past 11 months, Nardelli has taken another job and Chrysler has changed its game plan after pocketing billions of taxpayer dollars. Yet as recently as June 10, the new Chrysler CEO Sergio Marchionne said, "Work is already underway to develop new environmentally friendly, fuel-efficient, high-quality vehicles, including Chrysler's electric-vehicle program."

In spite of those glowing predictions, just days ago Marchionne announced that Chrysler plans to dismantle most of its electric-vehicle capacity and reduce its production goals for both full-electric vehicles and plug-in hybrids. Marchionne claimed that Chrysler's electric-vehicle division will have approximately the same number of employees, he also said that he now expects annual sales of only 28,000 to 56,000 electric vehicles by 2014--a small fraction of Chrysler's original goal of putting half a million electric vehicles on the road by 2013.

According to the policy team at Friends of the Earth, a leading environmental group, Chrysler's decision to reduce its electric car production by more than 90 percent will put an estimated one million extra tons of carbon dioxide into the atmosphere every year beginning in 2014. In response, Friends of the Earth has started a petition drive to send Chrysler a message and to remind taxpayers that, because of the bailout, they now own 10 percent of the company.

Consumers who sign the petition pledge to boycott Chrysler products unless or until the company lives up to its promises to taxpayers and Congress.

Personally, I think the message should be even stronger: Either use the money to carry out the programs and strategies it was intended to finance--or give it back.


November 16, 2009 at 10:01 am
(1) Linda says:

This makes me want to scream. This is why Chrysler will undoubtedly require another bailout should it drag its sorry carcass forward with these asinine plans.

Do they not understand the excitement that many of us have regarding next-generation electric vehicles? Isn’t it clear that consumers want these cars? Can’t they see the writing on the wall with regard to gas-powered vehicles in the long run?

RIP Chrysler. No one will mourn your passing when it happens…as it eventually will. You just signed your own death certificate.

November 17, 2009 at 7:07 am
(2) guidoLaMoto says:

We can argue the wisdom, not to mention the constitutionality, of govt bailouts, but more to the point: electric cars are not what we would like them to be anyways.
-Given that 3/4ths of US elec is generated from fossil fuels, that those plants are 60% efficient, that transmission of power is 90% efficient & that elec motors are 90% efficient, then int. comb. engine cars that get 40mpg put out the same amount of CO2 as the electric vehicles per mile.
-the little, old Geo was getting 50mpg until the lawyers put them out of production.
-electric cars take 4-8hrs to “fill ‘er up;” Gas cars take 3 minutes.
-elec cars have their own enviro problem: battery disposal
-elec cars have an additional safety problems: they’re too quiet. Pedistrians can’t hear them coming. And there are concerns about electrocutions of passengers & rescuers in accident situations.

-All engineering solutions represent compromises. Which set of problems do we prefer to deal with?

November 17, 2009 at 7:58 am
(3) mythical says:

The internal combustion engine is only about 20% efficient, so assuming your numbers are correct there’s still a massive disparity between the figures you present as equivalent, I’d suspect they’re made up on the spot to sound good.

This idea that electric cars are so silent that they’re a menace to pedestrians (presumably the blind) seems to be made up by people who’ve never actually been anywhere near an electric car in their entire lives. They make plenty of noise, more than enough to be heard by anyone.

Lastly, is the danger of electrocution really higher than you get in a normal car, which also has a fairly hefty battery and electrical system? For that matter is it higher than the danger of fire and explosion from the highly flammable fuel? I doubt it.

November 17, 2009 at 4:09 pm
(4) victoria says:

i agree with mythical ^
but actually some of what guidoLaMoto says is actually true,

November 18, 2009 at 6:16 am
(5) guidoLaMoto says:

Figures for efficiency of elec generation/transmission & CO2/kw for coal, gas & deisel were obtained from Wikipedia.
-it’s a simple calculation to determine that kinetic energy of a vehicle divided by potential energy of fuel is the efficiency of the engine.
- you can calculate the amount of coal (elec) needed to move a vehicle at a given KE
-efficiency of an engine is in the range of 10-20%. Obviously a car getting 20mpg is only half as efficient as one gettting 40mpg. There is not a “one size fits all” efficency figures to be quoted.
-Comparing efficiency shows the break even point for gas vs elec is at about 40-45mpg for gas and a little lower for diesel.
-I did the calculations based on a 30mph speed; efficiency decreases with higher speeds for each source.

=There’s no sense in hamstringing our economy with expensive restrictions on fossil fuel at this point. It will run out soon and we’ll be forced to use the alternatives then, but why complicate our economic problems now for only marginal (if any) benefit?

November 24, 2009 at 4:10 pm
(6) BobR says:

Because by the time the US gets around to green tech, it will be in last place, and will have to buy it from everyone else, just at the time when it can’t afford diddly squat. Fail.

November 25, 2009 at 11:23 pm
(7) Keith Forrest says:

Chrysler has to give back the tax payers money. Let them die if they can not produce what is appropriate for the times.

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