Chrysler’s Electric Vehicles Depend on Government Funds

By · June 08, 2009

The sale of Chrysler to Fiat is turning into a battle royale—with diverse and overlapping conflicts between the two auto companies, the Obama Administration, the US Supreme Court and Justice Department, secured and unsecured creditors, consumer groups and three Indiana pensions funds. The Indiana pension funds last week asked the Supreme Court to stop the sale, arguing (among other things) that the US Treasury Department overstepped its legal authority by using bailout funds for Chrysler when Congress intended the money for banks.

All-electric Town & Country minivans reconfigured for use by the US Postal Service

Chrysler's $224 million pitch to the Department of Energy includes production of 165 electric minivans reconfigured for the US Postal Service.

Those same bailout funds are also the key to Chrysler’s plans for plug-in hybrids and electric cars. Before sliding into bankruptcy, the old Chrysler had announced it was rapidly moving rapidly into the plug-in vehicle market and showed off three vehicles to make its case—a Dodge EV sports car (now dubbed the Dodge Circuit), a plug-in hybrid minivan and a plug-in hybrid Jeep. At the time, they promised that these vehicles would hit showroom by the end of 2010. The economic meltdown and subsequent bankruptcy threw these plans into doubt.

Uncle Sam to the Rescue

The new Chrysler is back with a new EV plan and—not surprisingly—they want taxpayers to pick up the tab. Chrysler’s ambitious request for $224 million from the Department of Energy will go head-to-head with proposals from General Motors, Tesla and other applicants. The key stimulus program allocated $400 million to support “transportation electrification.” (This is a different pot than the $25 billion in government loans for retooling.) Chrysler was silent on what would happen if its $224 million grant application were not fully funded—except to say that the federal dollars would “reduce the amount of time it will take to get these vehicles on the road.”

Chrysler’s plan, with a total budget of $448 million, is to build a 365-vehicle demonstration fleet of plug-in vehicles: 100 plug-in hybrid Chrysler Town & Country minivans; 100 plug-in hybrid Dodge Ram 1500 pickups;, and—in a clear attempt to win the hearts of federal funders—a fleet of 165 all-electric Town & Country minivans reconfigured for use by the US Postal Service. Chrysler would also use a portion of the money to fund a new tech center in Michigan.

New to EVs? Start here

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