Federal Agencies Initiate Investigation GM Lithium Ion Batteries

General Motors Co. (NYSE:GM) is being scrutinized by federal agencies over the safety of its lithium ion batteries, after a  fire developed in a Chevrolet Volt.

The investigation announced on Friday is being lead by the National Highway Traffic Safety Administration in collaboration with the Department of Energy. The battery fire incident comes about three weeks after passing the government crash test.

The two federal agencies will collaborate in the investigation and begin conducting additional testing of the lithium ion batteries of the Volt and also will continue to monitor the vehicles that are currently on the road.

The National Highway Traffic Safety Administration has also asked all other electric car manufacturers to submit information relating to the handling and discharge of the car’s lithium ion batteries. All electric car makers, who are either planning to or already have electric cars in the market, are required to submit this information. They will also need to submit any recommendation to mitigating any fire risks in any of these vehicles.

The National Highway Traffic Safety Administration conducted an investigation into the Chevy Volt that had caught fire. The fault was found out to the lithium ion batteries, which had overheated. According to the agency the battery developed the fire after developing a flaw in the battery after being subjected to rigorous crash tests. This damage in the battery took several weeks  to develop into a battery fire.

The National Highway Traffic Safety Administration discovered the fire after it was reported by Bloomberg. The incident took place at the test facility of National Highway Traffic Safety Administration and did not cause no injuries. This is so far the only known and reported incident of fire reported in Chevrolet Volt.

According to statement released by National Highway Traffic Safety Administration, the agency does not believe that any other electric car or Chevrolet Volt is at any risk of catching fire. Even though there have been reported numerous garage fires, none of them were pointed towards the lithium ion battery packs.

Any warnings by the National Highway Traffic Safety Administration could lead to severe drop in the sales of the Volt and also other electric vehicles.  GM on Monday reported it’s third quarter profit, its seventh consecutive profit after the end of recession. However GM warned of tougher challenges ahead, which can lead to drop in the sales of GM in Europe and other countires.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.