The decision announced Tuesday impacts Dodge's involvement in both the Sprint Cup Series and Nationwide Series. Penske Racing currently fields two Dodge Chargers in Sprint Cup and two Dodge Challengers in Nationwide, but Penske announced in February that it was switching to Fords for the 2013 season, leaving Dodge in the lurch.
Dodge, which earlier this year rebranded itself to SRT Brand and Motorsports, said the Penske move had an impact on the decision. SRT CEO Ralph Gilles said the company had been evaluating all its options for five months before making the decision on Friday.
"In the end, we simply couldn't develop the right structure to compete at the level and quality we are accustomed to," Gilles said. "You have no idea how much we feel the pain. We're just as devastated as everybody else."
Gilles did not rule out a return to NASCAR in the future and said the company's commitments in racing in Canada and the ARCA series would not change.
Among the four manufacturers in the top racing series, Dodge ranks last, though it does have three wins in the first 21 Sprint Cup races, one more than Ford. Chevrolet is in first, followed by Toyota and Ford.
Dodge returned to NASCAR competition in 2001 after an absence of nearly a quarter century and currently fields just the two Penske teams, the No. 2 driven by Brad Keselowski and the No. 22 currently being driven by Sam Hornish Jr.
Dodge has recorded 215 wins in Sprint Cup, including 55 since 2001, and has been represented in the NASCAR Chase for the Sprint Cup championship seven of the eight seasons the Chase has been staged.
"Dodge has been a great partner to NASCAR for many years, and they have been part of numerous memorable moments throughout our history," NASCAR Chairman and CEO Brian France said. "They made a business decision not to return in 2013, as they did in 1977 before returning in 2001. We wish them well and hope they again will choose to return to NASCAR at a later date."
The move by Dodge comes just a week after NASCAR announced that it had approved the new Sprint Cup Series race car designs for next season for all four automakers running the series. The new Dodge Charger, Chevrolet SS, Ford Fusion and Toyota Camry designs met the necessary targets for approval based on final aerodynamic tests last month. The cars will make their racing debut at Daytona International Speedway next February.
But things have fallen apart since that day in early March when hundreds of fans leaned in to get a glimpse when Dodge lifted the cover off its 2013 Sprint Cup car at Las Vegas Motor Speedway. Dodge had been working on the car for two years and was caught off-guard by the Penske announcement, which sent the manufacturer scrambling to find a major team to drive a car it spent so much time creating.
Still, Dodge's efforts for 2013 were regarded as a positive sign for its continued involvement in the sport, making Tuesday's announcement that much more painful.
"This is pretty huge," said former crew chief Larry McReynolds, now a television analyst. "This isn't years ago when NASCAR had several different manufacturers and if one had pulled out, it wouldn't have been so noticeable. But in 2012, we only have four, and with one less this news doesn't make the right statement about the sport. Anytime a major sponsor of any kind, whether a manufacturer, primary team sponsor or series sponsor packs up and goes home, it doesn't look good for NASCAR."
"Symbolically, this is a very big deal," longtime motorsports journalist Dave Despain said. "It comes at a very bad time, and it's a kick in the gut to loyal Dodge fans."
Penske Racing has been with Dodge since 2003, winning 29 races in Sprint Cup along with Keselowski's 2010 Nationwide championship. Robby Gordon is the only other driver competing with Dodge, and he's only entered three races this season.
Dodge had a deep stable of teams and drivers until the economic downturn left it with Penske as its only major team since 2009.
Gilles said the company would continue its strong support of Penske for the rest of the season, and Keselowski is a real threat to challenge for the Sprint Cup title. He has three victories, tied for tops in the series, and is a solid seventh in the points standings with five races to go before the 10-race Chase begins.
"We are doing well," Gilles said. "I'm really, really proud of what Brad has accomplished. It's getting really interesting.
"It would be almost a fairy tale story to leave on the highest note possible."