Chevrolet Volt Incident
In two crash tests for the Chevrolet Volt, one of the EVs currently on the market in the US, the battery has set on fire a while after the crash, the minimum time was one week. Although General Motors, who manufacture the Chevrolet Volt, and the National Highway Traffic Safety Administration (NHTSA) have both said that Volt owners have no reason to worry, and that in normal crash procedure the battery would be removed and taken to be repaired.
In the long run, this news may actually be a good thing for the EV industry, as regulations and crash procedures are clarified. It must be put into context, as of now no reports have been made of fires in electric vehicles on the road, compared with tens of thousands of fires in petrol-driven cars. The Nissan Leaf, currently the main competitor of the Chevrolet Volt, has a different system for keeping its battery cool, and both companies seem to be looking to the future, together with many other companies looking to enter the EV market.
Car manufacturers are increasing their EV ranges
VW have announced that they intend to manufacture EVs in China from 2013, which is the fastest growing market for vehicles. The Chinese government is supportive of electric vehicles but previous sales figures have been disappointing considering the high growth in vehicle sales overall. It would seem that the Chinese are focused more on brand name. BMW, a company that has been doing well in China, is also planning to introduce an electric vehicle in 2013, the BMW i3, together with a petrol-electric hybrid, the i8. BMW have heavily invested in research into the future of the industry, and is planning initiatives to encourage car-sharing to further reduce emissions.
EVs from Renault and Nissan are being used to transport delegates at the climate change conference at Durban in the next two weeks. Renault are set to introduce the Z.E Fluence and Twizy next year, two very different designs for EVs. The Nissan Leaf, which is on sale in China, Japan, the US and much of Europe, and has been well received by consumers and has won multiple awards.
Other companies allow a more direct investment into the theme
As the sector grows, supporting companies are set to benefit, such as producers of batteries like LG Chem and Johnson Controls or companies that offer solutions to car efficiency issues, such as Borgwarner. Other potential beneficiaries are companies that provide supporting infrastructure for charging EVs (such as Schneider Electronics), companies that produce the components, and energy producers.
Risks for investment in this theme include the state of the economy, as the automobile manufacturing industry is particularly sensitive to economic downswings, and changing government policy. America in particular is tightening its fuel economy standards at the moment, in line with similar movements worldwide, and if these trends continue this will benefit the sector, but governments may still reduce subsidies for these vehicles, which could hurt the related companies.