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GM Chevrolet Volt: Buyers spooked by electric car fires

Chevrolet Volt
Image caption Volt customers have been offered free loan cars until an investigation into battery fires is complete

Fear may not be rational, but it is always real and it always changes behaviour.

US carmaker General Motors (GM) is feeling it right now, as potential customers' enthusiasm about its innovative Chevrolet Volt is cooling down.

According to CNW Market Research, there has been a sharp decline in the number of people considering buying the Volt - an electric car that also has a petrol-powered engine to extend its range - following fires in its batteries.

The CNW survey of 3,800 people offers no conclusive proof, but there is nevertheless a strong sense that consumers are getting suspicious, both about whether GM knows what it is doing and about whether it is telling customers all that it knows.

Retaining customers

GM is working hard to mollify consumers.

At first, when the problem first came to light, chief executive Dan Akerson offered to buy back Volt models from any concerned customers.

Then, when dozens of customers came forward wanting to hand back the keys to their cars, the company changed tack.

Rather than automatically buying back the Volts, and thus losing its as yet tiny army of early adopters of electric motoring technology, GM started offering them some 6,000 free loan cars while awaiting the outcome of an investigation into the fires.

The hope, off course, must have been that the investigation would come up with findings that would calm nerves.

And perhaps it has.

Apparently, the fires in the Volts batteries were caused by a chain of events.

A crash test caused a leak of coolant liquids, which subsequently crystallised. This caused an electrical short that, in turn, resulted in a fire some days or weeks after the crash.

It could cost as little as $1,000 to fix.

Keeping it secret?

Image caption Dan Akerson says it is important for consumers, for GM and for the entire industry to fix this fast

But the real problem may no longer be a technical one, but one of dented consumer confidence.

It now appears the fire hazard was first discovered back in June, when GM first heard about a fire in a Volt that occurred some three weeks after the vehicle had been crash tested.

Yet, almost five months went by before either GM or the US National Highway Traffic Safety Administration (NHTSA) told dealers and customers about the potential risks and urged them to drain the battery pack as soon as possible after an accident.

Part of the reason for delaying the disclosure was the "fragility of Volt sales" up until that point, according to Joan Claybrook, a former administrator at NHTSA.

"NHTSA could have put out a consumer alert," he said, according to industry website Autoguide.com.

"Not to tell [customers] for six months makes no sense to me. They have a duty to inform people when they've rated a vehicle as 'top rated' and make it clear there's a problem."

Rebuilding trust

Failure to communicate openly with customers can have disastrous results for companies, as Toyota found during its mass recalls a couple of years ago.

So much is at stake for GM, not least because of the Volt's status as a halo car for the carmaker, both in the US and in Europe where it is badged Opel or Vauxhall Ampera.

Indeed, much is at stake for the motor industry as a whole.

Most carmakers, in the US and elsewhere, are working on electric motoring solutions of their own, so it is vital for them all that consumers trust them when they say battery-powered cars are safe.

GM chief Mr Akerson knows full well how important it is to rebuild trust with customers.

"I think it behoves everyone, including General Motors and all of our competition, but more importantly our customers, that we get it right," he says.

GM's campaign to convince customers that Volts are safe is backed by Transportation Secretary Ray LaHood, the Insurance Institute for Highway Safety and the NHTSA itself - all insisting drivers have nothing to fear.

If drivers believe what they say, then the crisis should soon be over. If not, then it is clear that GM has every reason to be afraid.

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