Chrysler to launch electric Fiat 500 in 2012

Chrysler, the struggling US car company part-owned by Fiat, of Italy, is to launch an electric version of the classic Fiat 500 model in the American market in 2012. 

The plug-in, all-electric Fiat 500 EV, the first electric vehicle for either company, would give Chrysler a competitor in its home market to the Nissan Leaf electric car, due to hit the US market later this year, as well as BMW’s Mini-E, which is already being test marketed.

The electric Fiat 500 will follow the introduction of a conventional combustion engine Fiat 500 in the US in late 2010 and will be built in Mexico.

In introducing the tiny Fiat 500 to the US, Sergio Marchionne, chief executive of both Fiat and Chrysler, is staking a huge wager that US motorists are finally willing to embrace the kind of compact cars that have been popular in Europe for decades.

Family compact cars, known in the trade as C-segment cars, already represent 30 per cent of sales in Europe and 25 per cent in the Asia Pacific and Africa markets. In the US, the figure stands at less than 21 per cent. Although this would appear to leave plenty of room for growth in US markets, other companies are already exploiting this gap in the market. Ford, for example, is marketing its Fiesta in the US.

Mr Marchionne is also betting on the appetite of Americans for electric vehicles, which still account for around 3 per cent of sales in the US.

The very first Fiat 500, or cinquecento, was launched in 1957 as a cheap and cheerful vehicle, ideally suited to the post-war European marketplace. Widely considered a design icon, it has undergone a number of changes over the years.

The new Fiat 500 EV will be a joint venture between both companies and follows Fiat’s decision to shift all of its development work on electric vehicles to Chrysler in the US. Chrysler said that this division of labour demonstrated the immediate benefits of the alliance between the two companies, as well as the speed at which they can work together on advanced vehicle programmes.

"The alliance with Fiat presented new opportunities to merge Chrysler Group engineering knowledge with new platforms, and the Fiat 500 EV is an outstanding example of our efforts," said Scott Kunselman, senior vice-president for product engineering at Chrysler.

"The Fiat 500 is a small, lightweight platform, perfect for integrating electric-vehicle technology."

Chrysler showed a concept version of the Fiat 500 EV, which had a range of more than 100 miles, in January at the North American International Auto Show in Detroit. But the company would not reveal what the range of the new vehicle or its pricing would be, other than to say that it would be competitive with similar cars. The Nissan Leaf is expected to sell for about $30,000 (£20,000) in the US.

It is possible that the bodywork of the Fiat 500 EV may be produced in Mexico at the same plant as the combustion engine version, although no decision has been announced.

Chrysler also said it was dropping plans to develop a Dodge Ram pickup truck for 2011, but said that it was pressing ahead with production of a test fleet of 14 plug-in hybrid Ram vehicles, with the help of a $48 million grant from the US Department of Energy.

Fiat now owns 20 per cent of Chrysler after the US company was restructured on completion of Chapter 11 bankruptcy proceedings last year. Chrysler’s market share in the US has fallen to less than 10 per cent.