Hybrid Battery Maker Cobasys Continues to Falter, Daimler Sues

Daimler AG, maker of Mercedes-Benz luxury cars, is suing Cobasys for failing to provide hybrid battery packs as agreed for a planned Mercedes-Benz gasoline-electric SUV. The German automaker paid Cobasys $6 million in connection with development of the batteries. Cobasys is jointly owned by Energy Conversion Devices Inc. and a division of Chevron Corp.

News of the lawsuit, reported in the Detroit Free Press, follows revelations earlier this year that Cobasys, a supplier of nickel metal hydride batteries, provided faulty hybrid batteries to General Motors. In December 2007, General Motors voluntarily recalled 9,000 hybrid vehicles due to an internal leak in the battery pack that caused the hybrid system to fail. The vehicle could still be driven, although without the benefits of the hybrid system. GM’s hybrid sales have been negatively impacted by limited battery supply.

The availability of reliable hybrid battery systems is seen as the key to expanding global hybrid production. Nearly every major automaker is heavily investing in hybrid battery production, and in strategic partnerships with battery suppliers. The next generation of high-mpg hybrid and plug-in hybrid vehicles will also depend on automakers’ supply of batteries.

In an exclusive interview with HybridCars.com, a Cobasys executive—who asked not to be named—responded to GM statements and press reports, saying, “A lot of it is not correct,” but declined to elaborate further.

Cobasys Blamed for Lack of American Hybrids

In turn, a former employee of Cobasys, who also chose to remain anonymous, wrote to HybridCars.com, placing the blame on the Cobasys management team. In an email, he wrote that the contract between Cobasys and the hybrid partnership between GM, Daimler, and BMW—which locks the partners into using Cobasys batteries for its current mild hybrids—is “the largest stumbling block in getting this product to market, and hopefully will not sour the North American market on American hybrids.” The inside source said that the automakers in the partnership have almost completely taken over responsibility to redesign the 880/800 battery. GM is serving as the lead in the effort. He added, “Now our American ingenuity and capabilities are being called into question by our foreign partners.”

The former employee wrote that the few engineers and scientists with the skills to resolve Cobasys’s problems had “been forced out or fired, primarily because they realized the difficulties ahead and had the misfortune to voice it to management who was blinded by a nice facility and pretty brochures.”

He pointed to these problems as the reason why Mercedes-Benz decided to use a lithium ion battery, from Johnson Controls-Saft and Continental AG, for the company’s planned Mercedes S400 luxury sedan hybrid in 2009 or 2010. “Had the Cobasys system worked, and had they had confidence in Cobasys, they would have used them.”

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  • Exxon Mobil

    Hahaha…Now the American car companies are blaming battery companies for not having enough hybrids. Battery companies weren’t the one sleeping with the oil companies for the last 30 years!!!

  • Skeptic

    Did you not see the part about Cobasys being **owned** by Chevron? Chevron …. the **oil company** …

  • Republican

    Shame on GM for killing the EV, now suffer the consequence.

  • Brian NY

    Cheveron is a partner in Cobasys along with Energy Conversion Devices. I guess the oil companies know the future and invest in it. In NY Shell Oil owns & runs a Hydrogen filling station. I wonder if SUNnoco invested in solar energy 🙂

  • niceGuy

    “Battery companies weren’t the one sleeping with the oil companies for the last 30 years!!!”

    Actually the Battery company is owned by an oil company in this case.

    Now, it was really stupid from GM’s part to buy batteries from an oil company.

  • Jerry

    Chevron will make more money from is oil than than, Cobasys
    Think of it as an investment in its future. By discreting Hybrid systems it keeps everyone on OIL
    Chevron Sees WIN/WIN

    There was a now ominous last piece in “who killed the electric car” when it indicated the at Chevron bought the rights. A little foreshadowing of things to come.

  • TD

    Well at least GM has the balls to sue an oil company!

  • Chanley

    Interesting article. If I could dream for a moment I would dream of Cobasys going under. I’m sure they will somehow coax the big 3 back under their misguidings. Or the oil companies will invest, and try to ruin future battery suppliers. Not sure if automakers can lean toward oil manufactures for the future. Lets hope more partnerships form with the major power companies.

  • RC

    Stupidity abounds in corporate America….hmm….wonder why Toyota doesn’t have these kinda problems. Perhaps we need a little Hari kari (spelling?) in top management.

  • sean

    Harakiri? No, they’re not samurais.

  • Need2Change

    The article states that Daimler is suing — not GM.

    Maybe GM is suing — and it appears tha they should.

    If they’re not, I wonder why not?

  • Mark Smith

    Well, Well, Well, we may all have hybrids today if Chevron did not stop the manufacturing of the NiMh battery in the first place, all years ago. Panasonic would still be making the excelent NiMh E-95 battery product that was used in the Toyota RAV 4, if it was not for Chevron stopping it. Thus stoped EV’s use and development the world over.

    Now Cobasys, partly oned by Chevron now gets the hammer… It is about time, to feel some pain, for messing up this whole EV battery development problem up in the first place. This is exactly why we are 10 years behind now.

    You cant even call Cobasys to buy a replacment traction battery, whats up with that? Technology that “nobody” can buy!

    The NiMh battery production should have never been stoped, the world suffered because of oil greed.

    Now we skip the whole eara of NiMh and go on to Lithium. What a loss to us all.

  • steved28

    It’s kind of poetic justice if you ask me.
    GM sells the patent to Chevron, Chevron = Cobasys, GM contracts with Cobasys for batteries, they all fail. GM fails. Screw em’ all.

  • A.H.S.

    *GM sells the patent to Chevron, Chevron = Cobasys, GM contracts with Cobasys for batteries, they all fail. GM fails* . . .

    Public is left with no desent hybrids so we get screwed as well.

    And I agree that its completely ridiculous that three major car companies would buy bateries that would make their cars more fuel efficient from a company whos profit comes from selling fuel. Then they are amazed when the batteries along with the hybrid drives fail and cause the drivers to need more fuel! WTF did they expect?!

  • rpecora

    Same thing happened to the electric trolley in the 40’s. But GM was the “bad guy” who bought up the old trolley companies nationwide and the converted them to rubber tires and oil burners (which they made), them sold the systems back to cities.


    Another example of a domestic industrial failure–GM having to recall hybrids and Coby producing a sub-par product. The public won’t entirely be screwed, though. At least Toyota is ramping up hybrid production by up to 70% for 2009, and that’s before the new Prius plant opens in Alabama in late ’09/early ’10. The only good thing about this is the the knuckle dragging domestic automakers may finally be pushed out of the picture by the repeated failures of both equipment and failure to recognize marketing trends.
    GM is a lost cause, always was. Birds of a feather flock together and GM and Coby are made for each other.

  • khooper

    Auto Parts Lover have said they would expect many former Exide workers to knock on their doors for employment opportunities.

  • Charles Peterson

    Patents should be abolished. They were intended to promote progress but mostly have the reverse effect.

    This is one thing that both the market fundamentalist Economist magazine and left progressive economist Dean Baker agree on.

    Dean Baker’s CEPR has published a plan to continue (and actually improve on) the development of drugs without patents. It is widely known that drug companies suppress information about natural remedies because they can’t be patented. And they don’t bother to investigate drugs to solve wordwide epidemics (no money in that) and do lifestyle drugs instead. And spend more money on advertising than research. Etc.

    Most research is funded by government anyway. Corporations only get involved when the basic research has already been done and there is little risk but high profit to be made.

  • John David

    None of the Cobasys top managers had any experience in their respective areas. In fact none of them had any battery industry experience. VP of Product Development was a Civil Engineer, did not have any clue on how a battery works. Their main qualification was knowing the top manager, who was from the oil industry, did not understand how a product development is done. Most of the Engineers had R&D background from ECD, did not understand the concept of real product development.

    GM and Daimler missed these obvious things. Can the Government really save them?