Chevrolet Electric Vehicles: Safety Concerns Could Cause Car Buyers to Hit the Brakes
After several years of promoting electric cars in the U.S. and billions of dollars spent by automotive companies to develop electric vehicle technology, electric car sales are under threat because of rising safety concerns. At the center of safety concern is GM‘s (NYSE:GM) Chevrolet Volt, which caught fire after crash tests by The National Highway Traffic Safety Administration (NHTSA). [1]
The safety concerns revolve around powerful lithium-ion batteries which is used by almost all major electric car manufacturers. NHTSA expects about 70% of battery-powered cars will feature lithium-ion batteries in the next decade. [2] While the NHTSA is currently not concerned about the safety of other electric vehicles, any deterioration in public perception can hurt sales of electric vehicles by Nissan (PINK:NSANY) and Tesla Motors (NASDAQ:TSLA). It can also possibly delay launch of electric vehicles by Toyota (NYSE:TM) and Ford (NYSE:F) (currently planned for next year) because of additional testing requirements. Marketing costs of electric car manufacturers can also increase as they try to allay customer’s safety concerns, which will in turn hurt margins in the near-medium term.
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