An interesting Bloomberg News report 10-9-08

By Mike Ramsey
Bloomberg

Chrysler LLC used unmarked test cars, a secret budget and an engineering skunk works to pull off last month’s surprise unveiling of three electric vehicles, thrusting itself into the competition between General Motors Corp. and Toyota Motor Corp. for fuel-efficiency bragging rights.
With a mandate from then-Chief Executive Officer Tom LaSorda to produce working prototypes by this summer, Chrysler in January 2007 plucked designers and engineers from around the company to work in a secluded area of the automaker’s Auburn Hills, Mich., headquarters, said Doug Quigley, the chief engineer on the project.
“We were completely shocked here,” when Chrysler announced the vehicles on Sept. 23, said Tracy Handler, an automotive product analyst at Global Insight Inc. in Troy, Mich. “And probably skeptical a little bit as to how real these are.”
Until the announcement, Chrysler rarely figured in industry electric-car buzz, dominated by GM’s Chevrolet Volt, due in 2010, and Toyota’s planned plug-in version of the gasoline- electric Prius, which has helped the Japanese automaker snare 77 percent of the U.S. market for hybrid vehicles.
Chrysler’s initial electric-car fleet consists of a Jeep Wrangler, Town & Country minivan and a two-seat sports car called, for now, the Dodge EV, based on a Group Lotus Plc Europa design.
Reporters at the event were able to test-drive a Wrangler sport-utility vehicle and a yellow two-seater on a test track behind company headquarters. An electric minivan was on display. One of the three models will be on sale in 2010, Chrysler said.
Developing prototypes is one thing. Whether a money-losing automaker one-quarter the size of GM and Toyota can assemble competitive advanced electric vehicles as collapsing sales reduce revenue is another.
“It’s going to be tough for them to pull this off,” said Mike Omotoso, a Troy, Michigan-based analyst at market-research firm J.D. Power & Associates. It’s unlikely that Chrysler will have the resources or technology to develop production vehicles by its 2010 goal, he said.
In addition to the Volt, which GM says will travel 40 miles on an initial charge, Tokyo-based Nissan Motor Co. plans to sell an all-electric car with a 100-mile range, also in 2010. Toyota hasn’t given a target date for the plug-in Prius.
Chrysler used existing models to speed the project along. The tradeoff is the vehicles may lack the weight-savings and aerodynamics GM’s Volt will have as an all-new design, Quigley said. Those improvements will go into Chrysler’s next generation models, already in development, he said.
It will be “interesting” to see how Chrysler accomplishes the power needs for a vehicle the size of a minivan, said David Darovitz, a GM spokesman in Detroit.
“They have to come out with something,” John Hanson, a Toyota spokesman in Torrance, Calif., said of the Chrysler project. He said new zero-emission vehicle regulations imposed by the California Air Resources Board makes it necessary for the largest automakers to sell some kind of super-low emissions vehicle, such as an electric car, starting in 2010.
Nissan spokesman Fred Standish in Nashville, Tenn., said the company wouldn’t comment on Chrysler’s electric-car program.
Chrysler’s U.S. sales fell 25 percent through September from the year-earlier period, while its market share dropped to 11 percent from 12.8 percent.
The privately owned automaker, purchased by Cerberus Capital Management LP in August 2007, isn’t required to report financial information. Chrysler said July 24 its automotive and finance units lost a combined $515 million in the first quarter. Robert E. Nardelli, the new CEO, said April 18 the company won’t be profitable this year.
To try to quell skepticism about its electric vehicles, the company decided to put 100 prototypes in test fleets. Otherwise “people would automatically conclude it’s just talk,” Quigley said.
Chrysler will give governments, utilities and companies vehicles beginning in 2009 to test in real-world conditions.
The company won’t say how much it is spending on the project. It has a $3 billion annual capital budget that includes new product development. Detroit-based GM has said it will spend at least $500 million building the Volt.
Chrysler’s future was thrown into doubt a few weeks after LaSorda, 54, approved the electric-vehicle program. The following month, in February 2007, the automaker was put up for sale by its parent, Stuttgart, Germany-based DaimlerChrysler AG. The sale to Cerberus was announced in May of that year.
Nardelli, 60, kept the project alive. He authorized the team to bypass the normal procurement process for parts to accelerate development, Quigley said.
The program was named ENVI, which is pronounced like envy, for “Environment,” Chrysler spokesman Todd Goyer said.
Prototypes, with their electric motors concealed inside the bodies of existing models, went unnoticed on test tracks and around Chrysler headquarters, said Lou Rhodes, president of the electric-car unit.
The development team, which has grown to “several hundred” employees, has worked in isolation on half a floor within Chrysler’s restricted-access design center.
“Ninety percent of the people in Chrysler had no idea what we were working on,” Quigley said.

 

well We'll see who makes it Big in the market.
But for now I'll be perfectly happy with a V6 Challenger.(as always)

 

HEY, that thing got a HEMI in it?? Oh wait, forget I asked....now where's did I put that extension cord...

(I don't have much faith in electric vehicles with today's technoiogy...so I'll wait and see how they perform in the real world)

 

Maybe this will turn out to be the ace in the hole that will allow Chrysler to survive... I sure hope so...

 

I too am hoping this is one of the vehicles that allows Chrysler to turn things around. All are hurting right now, not just the Mopar Gang. Heck, GM closed at $4.56 a share today so they are in lots of trouble. Even no can do wrong Toyota is feeling the pinch with sales down over 20% the last month. The one postive thing, perhaps, is Cerberus doesn't need to tell anyone how much they pump into this thing to make it turn around. I really have faith that that they as an investment group believe that it will turn around and cars such as the Challenger, the electric trio mentioned, and others to come out through 2010 and beyond will be what they need.

First off though, the economy needs to get back in shape or no matter how good a vehicle they build, people wont be purchasing any car from any manufacturer.