Posted By
JULIE CRIDLER
on
7/22/2010 7:15 AM
One of the concerns potential buyers have about electric and range-extended hybrid vehicles is the distance that can be driven between charges. But, there is another potential obstacle in the mind of the consumer, and that is the life expectancy of the battery pack and the cost to repair or replace. Most EV companies spend considerable effort touting their vehicle’s range potential, but few have directly addressed the battery issue.
Just recently, however, General Motors announced that it will offer an 8-year or 100,000 mile warranty on the Volt’s lithium ion battery and its 161 components. This is certainly a wise move on GM’s part, as they are eliminating a major source of worry for would-be buyers, and hopefully securing a strong sales position right out of the chute, albeit for a small customer base. The warranty can also be transferred to another owner within the 8-year / 100,000 mile timeframe at no cost, so that could possibly help to keep the vehicle’s residual values strong – at least in the very early years of the vehicle’s life.
GM has reportedly put their battery design through rigorous testing at extreme temperatures on both ends of the spectrum, and the extended warranty offering is a statement to their confidence in the product. At the same time, should the battery prove to be less robust in real-world conditions, GM will not take a significant financial hit, since the volumes are relatively low. Furthermore, the initial launch volume is small, and GM will be able to make improvements as needed based on any warranty claims it might see from the first batch of products out on the market.
So overall, GM made a good decision by offering the attractive warranty – they are eliminating consumer anxiety with relatively limited financial exposure for the company.
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