Italian magazine Quattroroute is reporting that Fiat is hard at work on a new hybrid system for smaller cars and it is prepared to share the system with Chrysler. The system could appear in the tiny 500 and the upcoming Topolino paired up with Fiat's new 900cc two cylinder turbocharged engine. The hybrid transmission integrates the electric motor/generator and the system uses lithium ion batteries. Fiat is apparently also designing the system with the intent of adding plug-in capability.
While Fiat is by no means the first automaker to bring forth what appears to be a full hybrid system, they could be the first to add one to a car as small as the 500. So far, most automakers are sticking to just automatic start/stop systems on these little cars. If a Chrysler/Fiat deal does get consummated, Chrysler would also likely get this system in its Fiat-derived small and compact cars. Thanks to Cristian for the tip!