June 4, 2010 / 1:31 AM / 10 years ago

Natural gas 'rational' alternative to gasoline-Chrysler

* Chrysler CEO: natural gas vehicles most cost effective

* Says U.S. government aid needed to support adoption

By Soyoung Kim

DETROIT, June 3 (Reuters) - Natural gas could be a near-term alternative to gasoline as automakers race to develop electric vehicles, and presents the most cost-effective solution to reduce U.S. reliance on oil, Chrysler Chief Executive Sergio Marchionne said on Thursday.

Chrysler is the only one of the six top-selling automakers in the U.S. market that does not have a hybrid vehicle offering and is under mounting pressure to improve the fuel economy of its lineup, which has relied heavily on big trucks and SUVs.

Most major automakers including General Motors Co [GM.UL] and Toyota Motor Corp (7203.T) are rushing to introduce battery-powered hybrids and electric vehicles, while Honda Motor Co (7267.T), lagging behind in plug-in hybrid technology, has bet on hydrogen fuel cell vehicles. Nissan Motor Co (7201.T) is pushing to launch its pure electric car Leaf at the end of 2010.

Marchionne, speaking at an event sponsored by the Detroit Regional Chamber of Commerce, said that natural gas is a “rational alternative” that can provide a near-term environmental solution on the road to vehicle electrification, by cutting greenhouse emissions by 25 percent compared with gasoline while being 25 percent cheaper.

“This project needs adequate attention and needs to become a priority in federal and state political agendas,” Marchionne said at the event in Mackinac Island, Michigan.

“It is the most effective solution, in terms of costs and timing, to lessen this country’s reliance on oil, especially foreign oil, while delivering a significant reduction in emissions.”

Fiat SpA, which acquired a 20 percent stake in Chrysler last year in return for providing the U.S. automaker with fuel-efficient engines and vehicle platforms, already sells a fleet of natural gas-powered vehicles in Europe.

Marchionne said the main impediment to adoption of natural gas-powered vehicles was a lack of infrastructure that would allow customers to conveniently refuel and government support was needed to spur development.

“Without a shared vision in which government assists industry, for example, with customer incentives and development of infrastructure, the potential for (natural gas) vehicles in the U.S. will continue to be limited,” he said. (Reporting by Soyoung Kim; Editing by Gary Hill)

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