Nissan and Toyota had Better Worry About the Volt Fires And So Should You

You have to be wondering how closely Toyota and Nissan are watching the NHTSA investigation into the Chevy Volt fires.  Actually, all car makers should be watching for fallout very carefully.  But specifically, Toyota just started taking orders on the Plug-in Prius.  And the Nissan Leaf has been competing (sales-wise) with the Volt from the beginning.  And consumers are not going to make a distinction between any of the car makers when it comes to battery fires.

They've seen too many cases in laptops and phones now of spontaneous combustion to ignore the issue.  Mind you, the opposite argument could be made, that they have gotten used to the risk of having batteries that could overheat near them on a constant basis.  But I doubt it.  There's something different about the batteries in electric and quasi-electric cars (the size!).

Imagine if consumers stop trusting large battery packs.  What will the automakers do when it comes to the new fuel efficiency guidelines if they can't sell at least some electric or extended range electric vehicles?  They are all working on them.  Imagine if all the research investment, time and money, has been wasted in the effort as they have to pull up and wait for a new generation of batteries to come forward?  Imagine what that will mean when they lobby for a postponement to the new fuel economy laws?

I can see it now.

"I'm sorry senator, we really would like to build and sell electric cars, but we just can't yet.  The technology isn't there.   I'm sure you understand why we can't put voters, err... I mean drivers at risk just to meet these fuel economy guidelines." - any car maker lobbyist in D.C.

In case you're not familiar, the NHTSA was conducting crash tests on the Chevy Volt (5-stars!).  They put one through it's paces (i.e. smashed it up, really good!) and then placed it into storage.   A few weeks later, a fire broke out in the battery pack (the coolant line had been severed) and burned up the Volt, plus several nearby cars.  Since then, in cooperation with Chevy (General Motors), they have subjected several other Volts to similar circumstances in an effort to start more fires.  They were successful (smoke and sparks, at least).

GM says this is a known factor when dealing with these battery packs.  One of the safety measures they've outlined is to discharge the battery pack after an accident to keep a fire from starting.  But the NHTSA didn't follow their guidelines and that's why the fire occurred.  In the meantime, they emphasize their cars are safe (noting the 5 star rating they received) but just in case anyone's nervous, they will let them drive a loaner for free while the investigation continues.  A 'handful' of customers have done just that.

Competition Between Leaf and Volt Heating Up

Everybody's talking about the competition between the Nissan Leaf and Chevy Volt (Detroit News, AutoBlog, GM-Volt, etc...).  But really, does it matter all that much that the Volt outsold the Leaf this past month?   Does it matter that the Leaf has been outselling the Volt since May?  Does it matter if either company makes their 10,000 sold in the first year?  Not really.

The difference between the two cars is profound.  GM may call the Volt an extended range electric vehicle, but the Leaf is all electric.  That means they are very different.  The Leaf does not have a gas option, meaning it can only go 70-100 miles on one charge. The Volt can go only 30-40 miles on electric before switching to gasoline (to charge the battery, but still it's running on gas at this point).  The Volt is $5-10 thousand dollars more than the Leaf.  But when you can get 1000 miles on 11 gallons of gas, maybe that's worth the extra money to those people who can afford the $35 thousand just to be able to choose between the two.

In their first year, the Volt and Leaf are depending on similar buyers; very financially sound; environmentally minded; and risk-minded individuals.  These people are willing to take a risk on something new, something they want to support.  They know there will be issues, but they are OK with being the guinea pigs.

The real question isn't how many of these people either company gets to buy (although I will say the more that buy, the better off the company is).  It's how, or even if, they are going to transfer to the more general public.   At these prices, maybe they won't be able to.  But if they don't, that 10,000 sold maybe the best they can do every year.  And considering both companies are planning on ramping up production to 5X or more, that's what really matters.

In order to sell 50,000 of these two cars a year; in order to make these cars ultimately profitable, and not just green flags to wave; in order to help transition our gas powered vehicle fleets into something a little less dependent on oil; that's what matters.

GM Invests $325 Million Into Retooling Plant for Electric

GM is going to put $325 million back into their Warren transmission plant, an effort to retool the plant into making electric parts.  This will create or save 418 jobs at the plant, which currently builds transmissions for large crossovers like the Enclave, Acadia and Traverse, as well as the Malibu sedan.

“This investment in the future recognizes the excellent work force and operation of this plant,” said GM Manufacturing Manager Gerald Johnson. “While we aren’t sharing many details about this product, I can tell you that this investment demonstrates how GM, working with our UAW partners, continues to innovate and bring new electrification solutions to our customers.”

The move is part of the current contract with the UAW, which states they will invest in the plant.  It's possible the parts being built will be for a mild hybrid system (start-stop) set for the Malibu next year.