Why electric cars are losing their aura

At major international motor shows all over the world during the past few years, the spotlight invariably focused on electric vehicles that promised great fuel economy (40 km per liter), zero tailpipe emissions, quiet, smooth operation, stronger acceleration and less maintenance than an internal combustion engine (ICE). But at the recent Geneva Auto Show, although a plug-in electric car, the Chevrolet Volt, was voted European Car of the Year 2012, the spotlight was back on high tech yet traditional engines that are more fuel-efficient than ever and produce less emission.

Why electric cars are losing their aura is a story worth telling. The electric vehicle (EV) has drawbacks, such as the limited driving range a rechargeable lithium-ion battery provides, the many hours required to fully recharge its battery pack, the high retail price of an EV compared to an ICE and the bulk and weight of the battery pack taking up considerable vehicle space.

Nonetheless, aside from the gasoline-electric hybrid vehicle successfully developed and marketed by Toyota Motor Co., car manufacturers saw the EV as a way to meet the higher fuel economy requirement of 22.7 km per liter proposed by the Obama administration for 2025. The EV would also reduce their dependence on fossil fuels and lower the level of air pollution.

The Volt

Despite being overtaken by China as No. 1 in car sales, the United States remains a lucrative market for the global auto industry. So, after pouring hundreds of millions of dollars into R&D, General Motors rolled out the Chevrolet Volt in late 2010 with an intro price of $41,000, the first EV to be mass-marketed by an American carmaker. GM solved the range anxiety problem via a gasoline-powered 1.4L generator in the Volt that kicks in to extend the car’s range to a total of over 500 km when the battery is depleted.

More auto manufacturers jumped on the EV bandwagon. In 2011, Nissan launched the all-electric Leaf whose base price has now risen to $35,200.  Before the Nissan Leaf’s intro, California-based Tesla Motors was producing and selling an electric super sports car for a $109,000 base price. Starting this year, Ford Motor Co. will offer the battery-powered plug-in Focus Electric for $39,200 in the US.

GM announced a 10,000 Volt sales target for 2011, but as of November last year there were only 6,000 Volts on the road. GM was hampered by production delays, distribution problems (around 500 of GM’s 3,500 Chevy dealers chose not to sell the four-seater Volt) and questions as to whether American consumers really want and are willing to pay more for electric cars.

Fire

But sluggish sales proved to be a minor problem. In June 2011, a fire occurred at a storage facility in Wisconsin after a Volt was crash-tested by the US National Highway Traffic Safety Administration (NHTSA). Then a Volt battery pack caught fire after being intentionally damaged a week earlier by the NHTSA. Another battery pack emitted sparks and smoke after a similar test, the government agency said. The tests were explicitly designed to replicate real-world crash scenarios.

GM officials said that the battery’s coolant system may have ruptured in crash tests, causing an electrical reaction that could have caused the fires days and weeks after the tests. Unlike the electric-powered Nissan Leaf, the Volt’s battery is not shielded from damage by a layer of steel reinforcement. The electric car’s aura dimmed further when the owner of a Tesla Roadster complained to automotive blogs that its battery could not be revived after being left unplugged and low on charge for more than two months, contrary to instructions in the owner’s manual.

The NHTSA’s probe of the Volt got a lot of media hype. After it was made public, GM offered to buy back Volt cars from dissatisfied customers and offered loaner cars to concerned owners. The negative publicity caught the attention of Republican congressmen who noted that the agency took six months to disclose the investigation to the public.

Halo car

Last January, they accused the NHTSA of deliberately failing to disclose the investigation since any perception of the Volt as dangerous would hurt the White House after President Obama, who is running for reelection, highlighted the auto industry’s and particularly GM’s upturn as one of his administration’s major successes. One congressman contended that the Volt “is a halo car not so much for GM but for the administration.” (A halo car is one that puts a halo on the company’s image, the way the Prius hybrid won the favor of American consumers for Toyota.)

Testifying before a House panel looking into the NHTA’s probe of the Volt, GM CEO Dan Akerson called criticism of the Volt unfair and politically motivated. “We did not engineer the Volt to be a political punching bag,” Akerson said. “And that, sadly, is what the Volt has become.”

Testifying before the same panel, NHTSA administrator David Strickland said that the agency closed the investigation after it found no reason to believe the Volt poses an unusual risk of fire. Strickland claimed that the agency waited to announce the investigation because it took months to determine whether the Volt battery was the cause of the initial fire in a facility with other vehicles, and whether a fire could occur again. He said the car never posed an imminent threat to drivers as the fire occurred weeks after the crash and in subsequent testing, other batteries sparked or caught fire but only after they were removed from the vehicles and intentionally damaged.

Committed

Despite the NHTSA’s clearing the Volt of any safety risk and GM’s taking steps to modify and strengthen the car, early this month GM announced it would suspend Volt production for five weeks. But GM’s North America chief said GM remains committed to the Volt and will strive to boost its consumer appeal via a new national ad campaign, a revised distribution system and a lower monthly leasing cost for the car. GM was happy to announce that it sold 1,023 Volts in February, up from 676 in January, outselling Nissan’s all-electric Leaf.

The Volt brouhaha seems to have jolted the auto industry into realizing that it will take many years to push the nascent EV technology forward and make it commercially viable. Meanwhile, some manufacturers are addressing buyer and regulatory demand for more fuel-efficient vehicles by expanding their range of smaller cars. BMW, for example, is developing a new line of front-wheel-drive cars and further variations on the MINI while also scheduling the release of its electric-powered 1 Series at the end of 2013.—With reports from Reuters, WSJ and NewsAlerts.com