Will the New Chrysler Be a Green Machine?

Will the New Chrysler Be a Green Machine?

Chrysler's bankruptcy may just result in a slightly greener hue among the U.S. auto industry: When the company emerges from Chapter 11 bankruptcy into new ownership by a trust for auto union retirees and Italian car company Fiat Group, one noticeable shift in Chrysler's lineup will be a new emphasis on smaller, more fuel efficient vehicles.

Of course, the company's popular larger vehicles like Jeeps, minivans and pickups will likely continue to exist, Fiat is bringing to the company its experience both with smaller, greener vehicles and with the European markets, where small has long been desirable, and concern about global warming is more deeply embedded.

Global warming, more than consumer demand, is going to be the big driver behind the small-car shift; an article by Eric Reguly from the Globe and Mail explains:
Governments everywhere want the industry to make cleaner, more fuel-efficient cars. This is not a polite request; it is already the law in some countries and soon will be in others. It means auto makers will have to find enough money to survive the crisis and fund a radical overhaul of their products' propulsion systems. "The automotive industry is set to undergo a technological revolution," says Deutsche Bank's Eric Heymann. "The key drivers are climate policy and the expectation that energy prices will start rising again[...]"
And the way to get out in front of looming legislation in the United States is to start making a shift toward having the bulk of your cars be small, efficient vehicles rather than large, gas-guzzling SUVs and pickups. Regula continues:
All of a sudden, Mr. Marchionne has something to offer, and it's not cash - Fiat has none to offer. It's access to small-car technology, including the platforms, the four-cylinder engines (remember those?) and a promising new two-cylinder engine. Chrysler would save billions in development costs by taking Fiat's small-car technology and slapping a Chrysler badge on it.
The new ownership will likely continue a trend that has been some time in the making at Chrysler, although certainly Fiat was an unexpected partner in the greening of Chrysler. Chrysler's ENVI product line Chrysler Electrics Back in 2007, we reported that the company intended to shift its focus to hybrids and other more fuel-efficient vehicles; as part of its ENVI division that's geared toward electric vehicles, Chrysler last fall unveiled five electric vehicles, all takes on existing product lines from Dodge, Jeep and Chrysler.

As Josie Garthwaite at Earth2Tech noted upon the announcement of the merger, the new Chrysler could have a significant impact on the market for green battery companies:
Chrysler tapped battery maker A123Systems earlier this year as the supplier for at least the first generation of plug-in vehicles in its planned ENVI lineup ... [w]ith Fiat on board and looking to re-introduce several of its brands on the North American market ... the electric lineup could eventually get some lighter-weight entries, based on Fiat's array of compact and subcompact vehicle platforms. As we've noted before, giving electric drive and decent battery range to these smaller cars would be less complicated than Chrysler's plans to electrify its heftier fleet.

Also on the electric vehicle front, Chryler's Peapod spinoff, launched its small, electric neighborhood-driving vehicle last month. Peter Arnell, the CEO behind Peapod, will also be at our upcoming Greener by Design conference next week, to give his insights into what is driving the future of green vehicles at Chrysler and elsewhere.

It will take at least a few months to see how the new regime at Chrysler unfolds, during which time we're likely to see heated discussions about U.S. climate legislation as well as preparations for the global Copenhagen climate talks in December. Given that the environmental problems we face won't be gone even long after the economy has recovered, I hope this shift to small takes root in Detroit.