Bloomberg News

GM Offers Loaner Vehicles to Volt Buyers After Battery Fires

November 29, 2011

Nov. 28 (Bloomberg) -- General Motors Co., taking steps to head off a potential backlash against the Chevrolet Volt, offered free loaner vehicles to buyers of the plug-in hybrid while it works with U.S. regulators to prevent battery fires.

The Volt is the subject of a probe by the National Highway Traffic Safety Administration after its batteries, supplied by LG Chem Ltd., caught fire in three crash tests conducted by the agency. GM will give any Volt owners a free loaner until the end of investigation, which was announced Nov. 25.

“GM and Chevrolet believe in the safety of the Volt,” Mark Reuss, president of the automaker’s North American operations, said on a conference call with reporters. “We will take every precaution to ensure the driving public of the safety of the Volt.”

The Volt is one of GM’s most-promoted models in the U.S. and one key to its push to meet tightening U.S. fuel-efficiency standards. The Volt has been on the market for a year and went on sale in all 50 states last month. In January, the world’s largest automaker plans to boost production to 60,000 a year from a rate of 10,000 annually.

GM is sending out a letter to all Volt owners and dealers. If any owners have concerns, GM will give them another car as a loaner to drive until the matter has been resolved, Reuss said.

The Detroit-based automaker has engineers working with NHTSA to establish the cause of the fires and no conclusions have been reached, Mary Barra, senior vice president of global product development, said on the call.

Depowering Procedure

GM rose 3.2 percent to $20.99 at 12:36 p.m. New York time.

The company is also developing a procedure for drawing down the power in the battery after an accident so that fires will not occur in the days after a collision, Barra said.

“We developed a process to depower the battery after a crash,” Barra said. “The battery assemblies were not depowered. We believe that if they were depowered the fire would not have occurred.”

A Volt caught fire three weeks after a side-impact crash test May 12 while parked at a NHTSA testing center in Wisconsin, leading regulators to conduct more tests. Volt battery packs were damaged in three more tests last week, causing two fires, NHTSA said in a statement on its website.

The agency said last week it doesn’t know of any crashes outside of testing that have led to battery-related fires in Volts or other cars powered by lithium-ion batteries. Chevy Volt owners whose vehicles have not been in a serious crash don’t need to be concerned, NHTSA said.

NHTSA, which said it’s working with the U.S. Defense and Energy departments to analyze the fires, conducted its first new test on Nov. 16 without a fire. The second test on Nov. 17 saw an initial temporary increase in battery temperature after the crash, and the battery pack caught fire at the test facility on Nov. 24. In a third test on Nov. 18, the battery was rotated hours after the crash and “began to smoke and emit sparks shortly after,” NHTSA said.

GM sold 5,003 Volts this year through October, according to Autodata Corp., a research firm in Woodcliff Lake, New Jersey.

--Editors: Bill Koenig, Kevin Miller

To contact the reporter on this story: David Welch in Southfield, Michigan at dwelch12@bloomberg.net

To contact the editors responsible for this story: Bernard Kohn at bkohn2@bloomberg.net; Jamie Butters at jbutters@bloomberg.net


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