Fisker Automotive said it’s pressing ahead with plans to build a new hybrid-electric car in Delaware despite the recall of an existing model to resolve concerns about a fire risk in its battery.
The California-based company still plans to make prototypes of the new model at the refitted GM plant in Wilmington starting in late 2012, and to start selling the car to the public in mid-2013, said Fisker spokesman Roger Ornisher.
“We’re still on track,” Ornisher said after the company discovered hose clamps in the battery pack of the existing Karma model that, if they were incorrectly assembled, had the potential to cause leakage of coolant, which might lead to short circuits and what the company’s website called a “thermal event (possible fire)” within the battery.
The coolant leak was discovered on an assembly line on Dec. 21 and was not reported by any dealers or owners of the $103,000 car, Ornisher said.
In response, Fisker is replacing battery packs and including modified hose clamps on all 239 Karmas that are with customers, at dealers, or at ports en route from their factory in Finland. Fisker said on Jan. 2 that "a majority" of the recalled cars owned by customers or held by dealers had been fitted with new battery packs or had hose-clamp assemblies repaired.
Fisker’s attempt to snuff out concerns about the Karma battery follows three widely publicized fires or near-fires during testing in the battery of GM’s flagship hybrid-electric Chevy Volt. Both cars use lithium ion batteries although they are made by different manufacturers.
The Volt incidents prompted an ongoing investigation by the National Highway Traffic Safety Administration – which announced the probe the day after Thanksgiving -- and spurred attacks by some conservative commentators on federal subsidies for electric vehicles.
U.S. Republican Congressman Mike Kelly of Pennsylvania responded to the Volt fires by saying the federal government has “no business” providing tax credits for vehicles which he said should be promoted by manufacturers through rebates and other incentives.
Fisker tried to distance itself from the Volt’s problems, which arose after the battery was damaged as the car was deliberately crashed to test its ability to withstand a side-impact collision. The company said its recall is focused on modifying the battery clamps to avoid any risk of leaking coolant.
Ornisher declined to say whether the Volt incidents had made Fisker more cautious about its battery than it would otherwise have been. “Customer peace of mind is paramount,” he said.
The hybrid-electric Fisker model to be produced in Delaware, referred to as "Project Nina", will create around 1,500 direct jobs by the time of full production in 2014, Ornisher said. The refitting of the GM plant is being paid for by part of a $330 million loan from the U.S. Department of Energy and a portion of $720 million in private equity, he said. The new model will cost between $50,000 and $60,000, approximately half of the Karma’s price tag.
Alan Levin, director of the Delaware Economic Development Office, acknowledged that Fisker’s battery problem may raise public questions about its vehicles, but he predicted the company will overcome the problems.
“They will survive this and will move forward,” he said.
Levin said he spoke with Fisker’s senior management which expressed confidence that the battery modifications were being effectively handled by its maker, Waltham, Mass.-based A123 Systems.
“Their feeling is that it’s being dealt with, they (A123) didn’t try to hide anything, and they are being proactive rather than reactive,” Levin told DFM News.
For the new Fisker factory, Delaware provided $21.5 million in grants for job creation and capital expenditure, some of which will be repayable if the company does not meet its job targets when the new facility is fully operational in the first three years, Levin said.
He said he was still expecting Fisker to meet its target of starting production from the new facility in the first quarter of 2013.
Delaware’s senior U.S. Senator, Tom Carper, a supporter of the $7,500 federal tax credit for EV buyers, played down the impact of the Fisker and Volt battery problems, and said they represent an opportunity for the manufacturers to nurture public confidence by fixing the problems swiftly and effectively.
“This is a hiccup, not a heart attack,” Carper said. “GM is making changes at no cost to the owners, and Fisker is doing the same thing. It should build customer confidence.”
Carper argued that development of electric cars will help wean the U.S. from its dependence on foreign oil and nurture domestic jobs to produce the power to drive the vehicles.
Dr. Ahmad Pesaran, energy storage team leader at the National Renewable Energy Laboratory in Golden, Colo., predicted technological advances will overcome the EV battery issues, and argued that the problems don’t represent a major blow to the development of the fuel-efficient, low-emissions vehicles.
“The possible fire hazard of lithium ion batteries and or fire hazard from possible coolant leakage is not a significant setback for Fisker Karma, Chevy Volt, or for plug-in electric vehicles in general,” Pesaran wrote in an email.
“These may create short-term anxiety, but engineering solutions will evolve as we learn more about the behavior of lithium ion powered PEVs (plug-in electric vehicles) during normal operation, crash, and post-crash.”
He argued that the public is “super-sensitive” to reports of malfunctions in new technologies such as EV batteries, but is much less interested in the problems that can arise from old technologies such as the gasoline engine which carries its own fire risks.
Clarence Ditlow, executive director of the Washington, DC-based Center for Automobile Safety, said he had not studied the Fisker case but that the Volt issues do not appear to represent a big setback for that car or the electric-vehicle industry in general.
“There is nothing about these fires that represents an insurmountable technological challenge,” he said.
But the Volt incidents should prompt EV manufacturers to ensure batteries are safe under all conditions, including crashes – which he said GM apparently failed to do, Ditlow said. “They didn’t do enough testing to have a reliable and safe vehicle,” he said.