Toyota Avoids Starting Fires, but GM and A123 Systems May Smoulder

Implications: Toyota has delayed producing vehicles with lithium ion batteries based on concern about fire and explosion risk in these large systems. GM on the other hand continues to work with A123 Systems on extended electric range lithium hybrids. Extended electric range vehicles, a poor economic concept, suffer from safety issues as well. GM's effort, which I consider to be mostly PR in nature, will also not deliver and will have significant impact on A123 Systems.  

Analysis: Large lithium batteries present difficult thermal management problems and are vulnerable to local overheating and short circuits. In large systems ,with lots of stored energy and reactive lithium, the results of a fire can be deadly.

In additionm extended range electrics (with 20-30 miles of electric capacity) are very expensive and would add at least another $10K to the existing hybrid premium.

Fire risk and bad economics make a poor combination which Toyota has recognized.

GM is still nominally moving ahead with extended range hybrids based on lithium ion technology from A123 Systems. Although the GM effort is predominately for PR purposes, potential vehicle sales have been incorporated into A123's future perceptions. Eventual deferment of the GM program will have a bigger impact on A123 than on GM.