The two car makers had announced in December the start of talks to form a strategic partnership to build on existing project-based ties such as SUVs and electric cars, and Mitsubishi said a capital alliance could be part of that deal.
PSA was eyeing a 30-50 percent stake in Mitsubishi for up to 300 billion yen ($3.4 billion), a deal that would give the struggling Japanese automaker a much-needed infusion of capital, the Nikkei newspaper reported at the time.
Mitsubishi and PSA said in a joint statement on Wednesday that President Osamu Masuko and PSA Chief Executive Philippe Varin met at the Geneva motor show and confirmed their intention to expand operational ties but concluded that a capital alliance would not be realistic.
Apart from cosmetic design changes the iOn is almost identical to the Mitsubishi electric car i-MiEV that was launched on the Japanese market last year. The iOn is expected to sell for at least 30,000 euros (40,600 dollars).
Peugeot, the pioneer and 1st worldwide manufacturer of electric vehicles will be launching the ion at the end of 2010. Its performance and 130 km operating range is obtained in particular due to the use of lithium-ion batteries, which will provide an efficient response to the challenges of urban mobility and respect for the environment.
According to the French car maker it already has some 2,000 orders for the four-seater that it hopes will give it a headstart on other manufacturers in the electric car segment on the European market.
The range is listed at 130 kilometres under ideal conditions but in normal start-stop city driving conditions the range is expected to be at about 100 kilometres.