Volt Jolt: Is Chevy Fire a Sign of Higher Electric Car Risk?

When two Chevy Volts caught fire after a routine crash tests damaged their batteries, federal regulators and environmentalists took notice. Risk managers should as well.

By JARED SHELLY, senior editor/web editor of Risk & Insurance®

Boasting an electric hybrid engine that gets up to 95 mpg and can drive at least 35 miles using no gas at all, the Chevy Volt hit the market in 2011 with high expectations. Environmentalists lauded it as a bold step toward decreasing oil dependence, while General Motors Co. hoped it could be the future of American car manufacturing.

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But that trajectory hit a snag in late November, when news broke that a Volt suddenly caught fire three weeks after a routine crash test damaged the lithium-ion battery. Although the blaze didn't injure anyone, it prompted the National Highway Traffic Safety Administration to investigate the safety of electric-car batteries.

During a second test, a Volt battery was intentionally damaged and subsequently caught fire, according to the New York Times, while another emitted sparks and began to smoke one day after it was damaged.

Jim Federico, chief engineer for electric vehicles at GM, was adamant that the Volt is just as safe as a gasoline-powered car. "I want to make this very clear -- the Volt is a safe car," said Federico in a statement. There are 5,000 Volts on the road currently, and the recent fire is the only known occurrence, the company said.

Another electric car to hit the market recently is the Nissan Leaf, and the company told Reuters that there have been no reports of Leaf fires.

The National Highway Traffic Safety Administration said that it believes electric cars pose no additional risk, but may develop protocols for first-responders dealing with electric car crashes as well as procedures for storing damaged vehicles to mitigate the risk of fire.

Companies that produce electric cars or own them, should be sure that damaged vehicles, get a thorough check before hitting the road again, said Gregory K. Myers, executive managing director of Beecher Carlson in New York.

"If you have a vehicle with a damaged battery, don't keep it in a garage or an enclosed area," said Myers, because that will mitigate damage from a possible fire.

Myers said he planned to meet with a client that produces electric cars (not GM) to discuss the Chevy Volt fire and come up with a strategy on how to handle damaged vehicles.

The risk of fires from batteries is not restricted to automobiles. Computer batteries also have a risk of fire -- so much so that airlines will not allow passengers to store batteries in checked luggage. Passengers can carry them in carry-on baggage.

While the Chevy Volt fire has certainly opened some eyes, it's not an indication that the Volt is a dud or that it has made people reluctant to buy electric cars, said Myers.

"If we start to see a streak of these," he said, "it'll be a different story."

November 23, 2011

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