TRAVERSE CITY, MI – A journey of a thousand miles begins with a single step, and this seems to be Chrysler’s strategy on the road to 54.5 mpg (4.3 L/100 km) fleet fuel economy.

“We’re picking the low-hanging fruit,” says Bob Lee, vice president-engine and electrified propulsion engineering.

So far, that translates into things such as minimizing parasitic losses in vehicle drivelines, adding 8- and 9-speed transmissions, optimizing current internal-combustion engines and adding diesel-engine options to its Grand Cherokee Jeep and Ram light-duty pickup truck.

Chrysler also recently added the battery-electric Fiat 500e to its lineup. Hybrid-electric powertrains are coming, but Lee is in no big hurry to add those. Most consumers simply are not willing to pay a big premium to reduce carbon-dioxide emissions – at least not those who patronize Chrysler stores, Lee says.

About 2% of all vehicles sold in the U.S. are hybrid-electric vehicles, with half of those Toyota models. That leaves another 40 or so HEV models to battle for the other 1%, Lee says.

The market for diesel-powered light vehicles also is tiny and dominated by one auto maker: Volkswagen. However, Lee says the light-vehicle diesel market in the U.S. is far less crowded than HEVs, making it a slightly better business proposition.

Chrysler’s top powertrain engineer acknowledges consumers rate fuel economy as the most important vehicle feature after value-for-the-money.

But he says buyers of some of Chrysler’s most popular and profitable vehicles rate fuel economy much farther down their list of wants and needs. Jeep Wrangler buyers rank fuel efficiency ninth in importance, and Ram truck buyers place the feature 19th.

Like most auto makers, Chrysler must improve its average fleet fuel economy 4% to 5% every year for the foreseeable future to be where it needs to be in 2025. But in the short term, Lee predicts 9-speed transmissions, automated manual transmissions, traditional IC engine enhancements and light-duty diesels will be much more popular than hybrids and EVs.

Vehicle electrification is coming to Chrysler, but it will be highly targeted, he adds.