Tata to make electric vehicles with Chrysler: report

MUMBAI (Reuters) - Tata Motors Ltd, India's top vehicle maker, has signed a development contract with Chrysler LLC for electric vehicles, the Business Line paper said on Wednesday, citing unnamed industry sources.

The deal, with the U.S. carmaker's Global Electric Motorcars unit, is for an electric version of Tata's mini truck Ace that would be sold in the United States, the paper said.

"The battery-operated vehicle has passed required safety and reliability tests, and the prototype is ready for production," it said, adding they will be exported as completely built units.

Tata Motors will begin exporting around 10,000 units by year-end, and ramp up to 50,000 units, it said.

"We are indeed exploring the feasibility of a vehicle on the Ace platform with an electric engine suitable for the U.S., in collaboration with a U.S. company," a spokesman for Tata Motors told Reuters.

"But it is premature at this stage to give any details."

Tata Motors, which launched a passenger variant of its best-selling Ace last year, is working with foreign collaborators on biodiesel and electric traction technology, and is in talks for hybrid engines and fuel cells.

Tata Motors recently unveiled the Nano, an ultra cheap car priced at just over $2,500, and is the front-runner for Ford Motor Co's Jaguar and Land Rover luxury brands.

In the United States, automakers are under pressure to meet tighter fuel emission standards beginning in 2012.

Chrysler showcased three "green" concept vehicles at the Auto Show in Detroit last week, including an electric model.

(Reporting by Rina Chandran; Editing by John Mair)