Chrysler unveils electric cars, stumps for loans

AUBURN HILLS, Michigan (Reuters) - Chrysler LLC on Tuesday showed off a trio of electric vehicles in development -- including battery-powered versions of its Chrysler minivan and Jeep Wrangler -- and vowed to bring one of them to showrooms by 2010.

By showing off prototypes still in the planning stage, Chrysler was hoping to shake a costly association with gas-guzzling trucks and dispel doubts about the strength of its vehicle development program under the ownership of Cerberus Capital Management .

But Chrysler Chief Executive Bob Nardelli also warned that without approval for a $25-billion loan package before Congress, the automaker could be forced to cut jobs and costs more deeply to free up funds for its electric car campaign.

"Unfortunately we've had to furlough many families as a result of the economic turmoil and the downward spiral in our industry," Nardelli told reporters at an event outside Chrysler's headquarters. "I'd like to make sure we don't have to go further to be able to support this advanced technology work."

The planned 2010 launch of an electric vehicle would put Chrysler in a race with its larger rival General Motors Corp , which plans to roll out the all-electric Chevrolet Volt in November of that year.

In addition to electric adaptations of its popular Chrysler minivan and its best-known Jeep model, Chrysler also said it was developing an all-electric sports car that takes direct aim at the $109,000 Roadster from privately held Tesla Motors.

The lightweight Dodge EV, being developed with Lotus Cars Ltd, is designed to jump from zero to 60 miles per hour (97 km per hour) in less than 5 seconds and run up to 200 miles on a single charge. The plug-in hybrid also is expected to undercut the Tesla electric sports car on price.

"We've got a lot more going on than people thought going on behind the scenes," Frank Klegon, Chrysler's vehicle development chief, told reporters.

FEDERAL LOANS SEEN KEY

Nardelli, who said he remained confident in Chrysler's ability to manage its liquidity, declined to specify how large a share of the $25 billion in funding the automaker was seeking for investments over the next five to 10 years.

But he said the company's ENVI unit -- set up last year to develop fuel-saving vehicle technology -- and Chrysler's planned investment in the three electric vehicles would be obvious targets for the federal funding.

Chrysler could also seek to get federal loans for investments already underway in building plants to produce components for a more fuel-efficient V-6 engine known as the "Phoenix" if the rules allow, Nardelli said.

"We want to be able to stitch those investments together ... and submit that for consideration," he said.

In a bid to conserve capital, Nardelli said Chrysler chose to adapt the Chrysler Town & Country minivan and the Jeep Wrangler SUV for the electric car program because that was cheaper than trying to build a new vehicle platform.

By contrast, GM chose to design the Volt from the ground up in order to maximize efficiency and to give the vehicle a 40-mile range on battery power alone, a benchmark Chrysler also set for its upcoming electric vehicles.

Unlike traditional hybrids, electric vehicles like those Chrysler and other automakers are rushing to market, are designed to use a small fuel-powered engine only to recharge the lithium-ion battery pack.

Chrysler said it was still working out production plans, pricing and the key issue of what supplier would provide the lithium-ion batteries for its first run of electric vehicles.

Chrysler Vice Chairman Tom LaSorda said Chrysler had been working with U.S.-based A123 Systems, a privately held battery maker also in the hunt to supply cells for GM's Volt. Chrysler also has been working with other battery suppliers and could consider a joint-venture, LaSorda said.

Chrysler, like its competitors, must meet a 35-mile-per gallon fuel economy fleet average under federal fuel economy standards approved last year. As of 2007, when it was still part of Daimler AG , Chrysler had the lowest fleet mileage of any of the major automakers.

The company's reliance on sales of trucks has hurt at a time when high gas prices are driving consumers to smaller vehicles. Chrysler's U.S. sales were down 25 percent through August, the largest drop for any of the major automakers.

Nardelli said the weak economy and the credit squeeze on both the auto industry and consumers made the federal loan program imperative.

"We see an economy in turmoil. We see an industry that has been spiraling downward. We see $4 per gallon gas, and now I think the biggest issue for all of us is the access of consumer credit for a car loan," Nardelli said.

(Editing by Bernard Orr)

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