DETROIT - Chrysler LLC is setting up an engineering division to design and build electric and hybrid vehicles.

Called ENVI, the division will be at Chrysler's headquarters in suburban Detroit. It will be headed by Lou Rhodes, a Chrysler veteran who has worked in the company's advanced vehicle engineering organization and product design office.

"The creation of ENVI allows us to focus on the development of a new generation of environmentally responsible Chrysler, Jeep and Dodge vehicles," Chrysler CEO Bob Nardelli said in a statement today.

Chrysler says ENVI will be staffed with specialists in engineering, manufacturing, procurement and supply.

"ENVI will operate as a startup with an entrepreneurial environment," said Chrysler Vice Chairman Tom LaSorda.

Chrysler plans to roll out its first two hybrid vehicles, a Dodge Durango and a Chrysler Aspen, in 2009. Those hybrids will use a transmission developed with General Motors and BMW.

Beyond that, the newly independent Chrysler has not said what it might do in the development of fuel cells.

Before Chrysler became part of DaimlerChrysler a decade ago, the company was developing hybrid technology. It produced a diesel-electric version of the Dodge Ram pickup that was tested by utility companies. But the truck was never offered for sale to consumers.

Chrysler also had an active fuel cell program and built several test vehicles. But that work stopped in 2002 when Chrysler closed its Liberty Technical Center. After that, Daimler engineers in Germany were responsible for the company's fuel cell and hybrid activities.

ENVI's mission will be to design vehicles that use pure electric or hybrid powertrains, not to convert existing vehicles, said Chrysler spokesman Nick Cappa. He would not say when Chrysler would display a concept or prototype vehicle.

You may e-mail Richard Truett at rtruett@crain.com