Chrysler Group LLC withdrew an application on Thursday for a U.S. Energy Department loan worth more than $3 billion to fund the development of gas-electric hybrids and electric vehicles.
In a statement from the automaker on Thursday, Chrysler said it “remains confident in its strategy to bring competitive, fuel-efficient vehicles and technologies to market on schedule” without new government assistance.
“The decision will not impact Chrysler’s ability to achieve its previously announced business plan targets,” the company said.
“Sergio lost patience,” Richard Hilgert, a Chicago-based analyst for Morningstar Equity Research, told Bloomberg in a phone interview.
“The company is now on solid financial ground and really no longer needs to have the DOE loans. They would have been at very attractive rates, but the market has very low interest rates right now and they could probably borrow at very attractive rates without these loans.”
Last month, at the North American International Auto Show, Marchionne expressed frustration about the lengthy process, smaller loan amount and restrictive terms.
Chrysler had originally asked for more than $7 billion from the $25 billion Advanced Technology Vehicle Manufacturing program. The program was part of a larger energy bill and was funded by Congress in 2008. Later, Chrysler reduced its request to $3.5 billion.
An Energy Department spokesman says the agency is happy Chrysler can reach its goals without the loan.