Yesterday, Chrysler LLC filed for bankruptcy as a deal with creditors fell apart.  The impact has been felt almost immediately, as today suppliers stopped delivering parts to Chrysler plants.  That won’t matter for long as Chrysler plans to shut every plant down for 30 to 60 days as it goes through bankruptcy court.  This will likely have a ripple effect through their other suppliers leaving additional bankruptcies in its wake.  But what about the suppliers to ENVI – Chrysler’s hybrid and electric vehicle development division?

Chrysler has already announced that the Dodge Circuit, an electric sports car, will launch in 2010.  These green vehicles are lauded enough to garner political support for saving them, but low volume, high profile vehicles like the Circuit are not going to improve the economic viability of Chrysler and have a huge shadow over them now. 

The Chrysler Town & Country and Jeep Wrangler plug-in hybrids (PHEVs) are even bigger questions.  Both are likely to be very expensive to build because of their large battery packs (22 and 27 kWh, respectively, compared to 16 kWh for the Volt and 12-14 kWh for the Prius PHEV), and it’s pretty clear that Chrysler doesn’t have the extra money to build them both now.

Let us not forget that Chrysler’s entry into bankruptcy is also partially a play to get Fiat on board.  So, after it emerges from bankruptcy court, Fiat will have a 20% share of Chrysler, with the potential to own 51% by 2016.  Bob Nardelli (Chrysler CEO) is planning to step down, with Fiat’s CEO Serge Marchionne taking the reins.  That means small, fuel efficient and cost effective programs are more likely to take the lead in product development. 

Only time will tell, but the implication here is that high-cost, PHEV programs like the oversized Jeep Wrangler and other expensive (and arguably unproven) programs like many of the ENVI vehicles are going to be carefully scrutinized and may not survive both the court case and Fiat acquisition.