Newly independent Chrysler is setting up a separate division to design and build hybrid and electric vehicles, reports Automotive News. The division, to be called ENVI, will be located at Chrysler's Auburn Hills headquarters and headed by company veteran Lou Rhodes. Its mission will be to design vehicles that would use electric and hybrid powertrains from the ground up instead of converting existing vehicles.

Chrysler's first hybrid vehicles will be versions of the Dodge Durango and Chrysler Aspen SUVs using dual-mode hybrid technology developed by BMW, GM, and Chrysler's former parent DaimlerChrysler.

The automaker had an active alternative fuel program prior to being bought by Daimler and produced a diesel-electric version of its Ram pickup and several fuel-cell vehicle prototypes. The truck was tested by utility companies but never made it to production, while fuel-cell development stopped in 2002 when the Liberty Technical Center was closed and all alternative fuel work was transferred to Germany.