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Screen shot 2009-11-10 at 12.59.32 PMWhen Chrysler accepted its more than $12.5 billion in government bailout funds to stave off bankruptcy, it promised to produce more fuel efficient vehicles and rush its electric models to market by 2011. Now, almost three years later, the company has launched zero hybrid cars and has canceled plans to develop electric vehicles under the Chrysler brand.

The decision — a major reversal in attitude and strategy — came from Fiat, which received a 20 percent stake in Chrysler from the U.S. government in exchange for its more fuel efficient chassis and engine designs. Ironic.

As of 2008, Chrysler had three electric vehicles in the hopper, and five EV concepts had been shown off at the Detroit Auto Show. One was even supposed to be launched as early as 2010. And the company went so far as to pledge that it would have 500,000 EVs on the road by 2014. As recently as August 2009, Chrysler accepted $70 million in government funds to supposedly pay for the development of a fleet of extended-range hybrids, an ideathat has since been tossed out.

Last week, Fiat CEO Sergio Marchionne slashed this estimation to 60,000 EVs, representing 2 percent of Chrysler’s sales. He made no reference to prior promises or commitments.

Under its former owner, Cerberus Capital Group, Chrysler had set up a fairly nontraditional in-house development group call “Envi,” short for environment. This group has been broken up and reassigned to Chrysler’s general talent pool.

The goal was to have its sports cars, trucks and commuter vehicles all hybridized or electrified, and in showrooms within the next several years. To date, Chrysler offers nothing beyond the “greener” models that get a highway mileage of 30 miles per gallon. There are only two of them, with 25 miles per gallon being the average for their sedans.

Fiat has considered bringing its plug-in van to the U.S., but the plans aren’t final. It will no doubt be lapped by Ford, which has announced plans for its own similar vehicle.

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