Chrysler drops ENVI electric car program, a jewel of their proposal to get $12B in taxpayer funds, by the way.

Back in September 2008 I wrote about an announcement by Chrysler where they were planning to enter into the electric car market with 4 new models. I thought it was a good thing to see and Chrysler knew the Obama administration would think so, too, a fact they exploited when it came time to put their hand out for a $12B bailout. With cash in hand, there’s apparently no reason to keep ENVI alive. From Reuters:

Chrysler has disbanded a team of engineers dedicated to rushing a range of electric vehicles to showrooms and dropped ambitious sales targets for battery-powered cars set as it was sliding toward bankruptcy and seeking government aid.

The move by Fiat SpA marks a major reversal for Chrysler, which had used its electric car program as part of the case for a $12.5 billion federal aid package.

As late as August, Chrysler took $70 million in grants from the U.S. Department of Energy to develop a test fleet of 220 hybrid pickup trucks and minivans, vehicles now scrapped in the sweeping turnaround plan for Chrysler announced this week by Fiat CEO Sergio Marchionne.

Chrysler’s saying they intend to “absorb” this project into their more “traditional” development teams. I would argue that there was a reason they split the project out of those teams to begin with and that putting it back in there will slow the project considerably. (If not kill it outright.)

More importantly, their commitment to that project was something they pointed to in making the case that they deserved a bailout. To take the project apart now seems like a breach of contract to me. It’s a shame that they’re dropping it. We could certainly use the options.

(Hat tip: Watts Up With That?)

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