Fiat Terminates Chrysler's All-Electric Car Plans - What's Going to Happen to the $73 Million Gov. Grants for the EV Test Fleet?

Just over a year ago, the Chrysler Group's newly formed Envi division unveiled a series of production-based electric cars that it planned to put on sale. Fast forward a few months, Chrysler went in and out of bankruptcy, sealed a deal with the Fiat Group and then, in August 2009 under the leadership of its new CEO, Sergio Marchionne, secured a $73 million grant from the Obama administration for the manufacturing of 220 plug-in hybrid and electric pickup trucks and minivans in St. Louis and in Michigan. Well, guess what;

According to a news report from Reuters, as part of the Marchione's recently announced five-year business plan to revitalize the Chrysler Group, Fiat has pulled the plug on the automaker's Envi division as well as the development of the test fleet for which it had received the government grant.

Chrysler spokesman Nick Cappa told Reuters on Friday that Envi, which was responsible for the EV range, will be absorbed in the normal vehicle development program and its former chief Lou Rhodes will head an electric car division for both Fiat and Chrysler.

The group's CEO Sergio Marchionne told reporters that for the time being and with the current technology available, he doesn't believe much in EVs and that electric cars would represent just "one or two per cent" (less than 60,000 vehicles) of Chrysler's sales by 2014.

"Until the (battery) storage gets resolved, I think electric vehicles are going to struggle," Marchionne said.

As of yet, there's no official word from Chrysler, but if the report from Reuters concerning the part about the scrapping of the 220 plug-in hybrids turns out to be true, one should wonder what's going to (or what should) happen to the $73 million grant that the automaker received. Post your thoughts in the comment section below.

Via: Reuters