The Chevrolet Volt was a big part of the restructuring deal General Motors had with the Obama Administration, when it applied for bail-out money.

Now that the vehicle is here, it is not without its problems. Sales of this plug-in hybrid have not been great, and these days, everyone is talking about the recent crash-related fires.

In the last few months, some Volt’s have caught fire and many believe it was linked to its battery system.

Now GM is working on a solution to prevent any future fire issues with the battery. The proposed solutions include laminating the circuitry in the battery, reinforcing the case around the battery pack, and better protecting the coolant system from leaks in a severe accident.

The cost of fixing the issue will cost GM roughly $1,000 per Volt, or about $9-million. This solution, if it works, will still be a lot cheaper than it would be to redevelop a new battery from scratch.

Many believe that the government knew about the risks involved with the Volt, but hid the information to give this car a chance to sell. Negative publicity is never a good thing for a new product, especially one it’s banking its future on. A U.S. Housing committee will meet in January to investigate this matter in more detail.

Meanwhile, the Insurance Institute of Highway Safety (IIHS) said on Monday that it does not plan to change its five-star rating for the Volt. The National Highway Traffic Safety Administration (NHTSA) also has no plans to change its five-star rating for the Volt. Consumers look at results from both these parties to determine which vehicles are safe.

Meanwhile, GM’s CEO Dan Akerson said that the company would buy back any Volt from a concerned customer, or provide any loaner vehicle to its customer while the Volt is being fixed. Will this gesture work? Time will tell. But since the Volt wasn’t flying out of the showroom’s in the first place, the current negative publicity could really damage its future sales.

[Source: Automotive News]

Volkswagen was one of several large automakers that did not sign off on the Obama Administration’s proposed Corporate Average Fuel Economy (CAFE) standards for 2025.

“We still have a dialogue going on with the administration in terms of how we think the policy needs to be adjusted,” said Jonathan Browning, CEO of Volkswagen Group of America.

Volkswagen is worried about the current proposed rules that place an unfairly strict rules on passenger cars. Heavier light trucks on the other hand, have much more lenient terms attached to them. Passenger cars maybe required to achieve 5% annual improvements and light trucks may face 3.5 percent annual improvements. The largest trucks on sale face almost no ruling for the 2017-2020 time frame.

“The proposal encourages manufacturers and customers to shift toward larger, less-efficient vehicles, defeating the goal of reduced greenhouse-gas emissions,” one spokesman said.

Volkswagen is also upset regarding the administration ignoring the improvements the German automaker has made to its diesel models. Diesels offer up to 30 percent better fuel efficiency and are installed in up to 80 percent of some VW models sold in the U.S.

“Diesels are growing to pretty much twice the scale in terms of (U.S. sales) of electric vehicles and hybrids together. It’s a technology that is available and affordable…and we think it should be part of the landscape going forward,” Browning explained.

[Source: Wards Auto]

There’s no question that the US Federal government’s proposed Corporate Average Fuel Economy standards have drawn a lot of fire and widespread opposition from automakers, especially as the Obama administration is now pushing for a 56 miles per gallon fleet average target by 2025.

In particular, General Motors and Chrysler, still on the road to recovery after receiving Government assistance in 2008-09 have expressed dismay at the proposed standards, since large trucks and SUVs, which will find the regulations tougher to meet, still represent a sizeable portion of their profits.

As a result, in an effort to win support for it’s fuel economy plan, the Obama administration is considering proposals that would loosen the requirements for large trucks and SUVs, giving automakers, namely the Detroit three, a larger window with which to comply with the new regulations.

This would mean an improvement of 3.5 mpg per year, instead of the 5 mpg increments required by passenger cars and smaller trucks and SUVs.

Import automakers, whose product portofolios tend to focus more on smaller cars and SUVs, claim these changes would give their Detroit rivals an unfair advantage, citing that such proposals would ultimately defeat the objective of the proposed CAFE requirements.

This isn’t first time this year the Feds have backed off on proposed fuel economy standards. Originally ,the mandate for 2025 was a 60 miles per gallon fleet average, though widespread opposition reduced it to the current 56 mpg proposal.

[Source: Automotive News]

President Barrack Obama’s initiative for government fleet vehicles to be able to run on alternative fuels like E85 ethanol, could result in higher gas consumption, rather than reducing it. That means, this project could end up doing the opposite of what it was set out to achieve.

Only 1-percent of gas stations offer E85 in the United States, so only very few government fleet vehicles can take advantage of this fuel. So most fleet drivers end up using regular gas.

And they end up using more of it, because the vehicles they drive, the ones that can run on both regular gas and E85, are not the most fuel-efficient vehicles sold in the country. So while this initiative had its heart in the ‘green’ place, it could ending up increasing green-house gasses.

In order for the President’s plan to work, the infrastructure needs to improve vastly which would increase the availability of alternative fuels.

President Obama recently said that by 2015 he wants to see more fuel-efficient of alternative fueled vehicles to be used in fleets, as part of the plan to reduce dependency on foreign oil. However, hybrid, plug-in hybrid, and fully electric vehicles aren’t as widely available and cost more to buy. Plus they lack the durability that is required by some government fleets.

In 2009, the first year of the Obama administration, government vehicles increased gasoline use by 3-percent. Figures for 2010 are to be released later this year.

[Source: Automotive News]

Last year, the Obama Administration heavily backed Detroit’s automakers with a big helping of government funding. The bail-out money that was partly provided to General Motors and Chrysler, was for these companies to develop and sell hybrids, plug-in hybrids and pure electric vehicles. The end result was the hardly amazing Chevrolet Volt.

However, the Obama administration still wants to help the electric and hybrid car industry, and their latest move to help move such products is to cut funding for clean-diesel and fuel-cell technology.

So while $80-million was budgeted for clean-diesel development in 2010, for 2011 that budget is cut down to zero. Congress had originally promised $500-million over 5-years for this project. Similar cuts have been made towards the development of hydrogen fuel-cell vehicles.

The money that is being cut from clean-diesel and fuel-cell vehicles will now go to plug-in hybrid vehicles. Under the new plan, the $7500 tax break will be given to the customer at the dealership, not when taxes are claimed at the end of the year.

So while this might be great news for anyone who is looking to buy a plug-in hybrid vehicle, this will have an effect on manufacturers who had invested in other technologies. Essentially, those who manufacture clean-diesel or hydrogen fuel-cell vehicles will see marketing their vehicles in North America pointless.

[Source: Bloomberg Photo Credit: egmCarTech]

The Obama Administration has made a significant effort to increase the number of electric cars being produced, but according to a new report by Indiana University it won’t meet its goal of getting 1 million electric cars on the road by 2015.

The report indicates that the current ‘production intentions’ of automakers won’t result in one million EVs on our roads by that time. And whether the current production goals set by automakers can even be met is in question, especially with recent reports that GM’s sales targets for the Volt will not be met.

Currently there are only 5,000 electric cars on the roads in the U.S., of a total of 250 million vehicles. And even one million EVs represents just a third of a percent of the total car sales. By comparison, hybrids currently account for roughly 3 percent of annual sales.

Despite significant government incentives created to cut the costs of EVs to consumers, the report calls for more action by the administration, including a larger (government funded?) demo program to help raise awareness.

[Source: The Detroit News]

If you’re a skeptic of electric and hybrid vehicles and think the only reason they’re having any success in the market is because of support through government incentives then you’re going to love this.

According to a new report by Bloomberg, the Obama Administration is responsible for purchasing almost a quarter of all hybrid vehicles sold by both Ford and General Motors. Purchases of hybrids by the administration have also increased as overall retail sales declined. In 2008 hybrids accounted for one percent of all vehicles purchased by the U.S. General Services Administration, while in the past two fiscal years the agency has purchased 14,584 hybrids – roughly 10 percent of the total 145,473 vehicles. Meanwhile, hybrids are approaching their third consecutive decline in sales.

Often credited for not taking bailouts by the Federal Government, Ford has benefited from the 2009 economic stimulus package with a total of 3,100 hybrids being bought out of a $300 million fund. An additional 5,600 hybrids were bought using cash from selling older fleet vehicles. Since Obama took office, his administration has accounted for 14 percent of all Ford Escape Hybrids sold, 29 percent of all Ford Fusion Hybrids sold and 64 percent of all Chevy Malibu Hybrids sold.

And while Ford and GM certainly aren’t the only automakers selling hybrids, they essentially account for all of the GSA’s purchases, with the department having acquired just 17 Toyota Prius models and only five Honda Civic Hybrids in the past two years.

Critics have long criticized government incentives as propping up sales of hybrids, which wouldn’t otherwise sell. Now it appears as though the government is doing far more to subsidize the ‘green car’ industry.

[Source: Bloomberg]

When the U.S. government first released its list of the most popular Cash for Clunkers vehicles traded in as well as those purchased there seemed to be no surprises. It looked like consumers were getting rid of their Ford Explorers for Priuses. But after taking a longer look at the data, it seems that might not have been the case after all, as two trucks, the Ford F-150 and Chevrolet Silverado, were actually among the top ten vehicles purchased under the Clunkers program.

The reason for the change is that the initial listing classified vehicles specific to their drivetrain, meaning that a rear-drive or four-wheel drive pickup would count as two separate trucks. But by looking at just the vehicle model, the Silverado takes now takes the 8th spot, while Ford’s F-150 sits in 10th. Another winner was the Honda CR-V, which moved from outside the top 10 to sixth place.

As a result, three vehicles that are no longer in the top 10 are the Honda Accord, the tiny Honda Fit and (gasp!) the Toyota Prius.

These new numbers suggest that the Obama Administration’s plan to promote the sale of fuel-efficient vehicles might not have worked as effectively as planned, with the average fuel-economy of the new vehicles rated at 19 mpg, as compared to an average of 35 mpg for the three vehicles dropped from the list. No one can argue that the CARS legislation did, however, give a significant boost to the auto industry – if only temporarily.

[Source: LeftLaneNews]

The U.S. auto industry showed continued improvement in the month of August, helped on by the Obama Administration’s Cash for Clunkers program.

Ford was once again a big winner as sales increased 17.2 percent over last August, a significant improvement over the 2.4 percent growth in July – which was thought to be good at the time.

Honda posted a 9.9 percent increase while Toyota pulled itself from the gutters with a 6.4 percent gain.

Unfortunately for GM and Chrysler, the turnaround seems to have left them behind, with GM slipping 20.1 percent and Chrysler dropping 15.4 percent. Both of those numbers are worse than in July, with GM dropping 19.4 percent and Chrysler dropping 9.4 percent then.

Two smaller players in the U.S. market that are now poised to become larger players are Hyundai and Subaru. Hyundai saw an increase of 47 percent, while Subaru posted 51.5 percent growth. Volkswagen also posted growth of 11.4 percent.

Current estimates now put the total number of vehicle sales for 2009 at the 14.4 million mark, a significant increase from the sub-10 million units forecasted during the height of the recession.

[Source: Automotive News]

See the full U.S. Auto Industry August Sales Results after the jump:

U.S. Transportation Secretary Ray LaHood said the Car Allowance Rebate System (CARS), offering incentives for trade-ins, should have enough funding to support one more weekend of sales. Earlier this month, the U.S. government pumped $2 billion into the program on top of the original $1 billion in funding. At the time, LaHood estimated the total $3 billion in funding would last until Labor Day. Looks like LaHood was off by a couple of weeks.

LaHood said there are no plans to expand the program again, but some representatives, including Democrat Sander Levin or Royal Oak, Mich.,  say Congress should add another $1 billion into the program.

[Source: The Detroit News]

A week after reports that the original $1 billion allocated for the Cash-for-Clunkers program was running low, President Obama today signed into law an additional $2 billion that will keep the program running and fuel a rebounding auto industry.

In just two weeks since the original bill was passed the Cash-for-Clunkers or CARS (Car Allowance Rebate System) has netted $920 million in rebates and has accounted for more than 220,000 new car sales.

The boost to the auto industry has prompted speculation that total car sales for the year, which only a few months ago were pegged at under 10 million, will now exceed the 13 million unit mark.

Automakers are also looking to boost production output as inventory levels have dropped to their lowest levels since 1992. Measured in the number of days worth of inventory a dealer has on its lot, Chrysler dropped its inventory from 71 to 40 days, Ford shed 9 days (from 57 to 48) while both GM and Toyota lost 18 days, from 82 to 64 and 47 to 29 respectively.

[Source: Automotive News 1 and 2]

Auto parts maker and engineering firm ZF Friedrichshafen AG says that its new lineup of driveline modifications and transmissions, when combined, can deliver up to 18 percent better fuel-consumption on traditional gasoline powered cars. The results are even more impressive for hybrids, with total fuel-economy rising 30 percent.

Harald Naunheimer, VP of research at ZF delivered the news at the Center for Automotive Research’s Management Briefing Seminars in Traverse City, Michigan, earlier this week. Naunheimer said all of his company’s new initiatives will make their way into production cars starting next year.

Included in the list of fuel-saving technologies are lighter transmissions with more gears, as well as electric, rather than mechanical, features. Electrical power steering can account for a savings of 2 to 3 percent, while electric active roll stabilizers add another 1 to 2 percent.

A start-stop function, which shuts off the engine at stop lights or when stuck in traffic, can save up to 5 percent while a new, lighter transfer case for all-wheel drive cars can add an additional 1 to 1.5 percent.

The single largest way to boost fuel-economy, however, is with a transmission with more gears. ZF says its new 8-speed box can deliver a 6 percent boost in fuel economy over a six-speed unit. Lexus already uses an 8-speed transmission and BMW recently launched a new 8-speed box in the flagship 760Li (pictured above). This, however, raises the issue of cost.

With an 8-speed in a six-figure BMW, we’re unlikely to see the same technology make it into a Toyota Corolla any time soon. Still, the race is on for improved fuel-consumption as the Obama Administration’s new CAFE regulations will see fleet averages for passenger cars rise to 35.5 mpg for 2016, up significantly from 27.3 mpg for 2011.

[Source: Automotive News]