Electric Vehicle 101: Know Your Warranty

How long should you expect a plug-in car battery — the most expensive part of the vehicle — to last before dwindling storage capacity or other problems leave you longing for a replacement? For components in conventional vehicles, that might be a relatively simple question to answer by looking at the warranty. But it gets considerably more complicated with plug-in hybrid and electric cars, as battery warranties are tied to a hornet’s nest of vehicle emission regulations.

When it comes to warranties, it’s helpful to think of plug-in vehicles in two general categories: all-electric models with zero tailpipe emissions (such as the Tesla (s TSLA) Roadster and Nissan (s NSANY) LEAF), and hybrid models (with or without a plug) that use electricity but also have an internal combustion engine that produces emissions when it’s in use (as in General Motors’ (s GM) Chevy Volt and Fisker Automotive’s Karma).

This distinction is important because of regulations set by the California Air Resources Board (CARB) and adopted by several other states that cover vehicles’ smog-forming emissions and the major components affecting how much pollution comes out of a car’s tailpipe. As John Swanton, an air pollution specialist with CARB, explained to us in an interview, “the point is to warranty expensive parts that are likely to cause emissions problems if they fail, but may not incapacitate the vehicle.” In other words, if the battery in a plug-in hybrid goes kaput, the car could conceivably stay on the road, belching out smog-forming emissions comparable to “a pretty poorly running gasoline vehicle.”

This is the “real meat” of California’s vehicle emission standards, said Swanton: “making vehicles cleaner, longer, not just pushing advanced vehicles out to new buyers.”

With this in mind, CARB has set a 10-year or 150,000-mile standard for batteries in vehicles designated as “partial zero emission vehicles,” or PZEVs — the models that as Swanton put it, “bridge both worlds” between gas and electricity.

According to Swanton, the 10-year time frame came about as a “recognition of what was state of the art” when the standard was adopted back in 2008. But he says “it is a living regulation, so if the parameters of what’s in the marketplace change, we’re flexible.”

So what is in the marketplace? A whole lot of question marks, and a few early data points. On Wednesday, GM announced that the earliest Chevy Volt models will carry an 8-year, 100,000-mile warranty on all 161 components of the battery, as well as the thermal management system, charging system and electric drive components. That’s a huge leap from the warranty on the Tesla Roadster, which qualifies as a ZEV under California regulations (this enables the company to, among other things, sell ZEV credits to other automakers).

Tesla Motors (s TSLA), currently the only automaker selling highway-capable electric vehicles in significant numbers in the U.S., offers a “bumper-to-bumper” warranty for three years or 36,000 miles for the Roadster, including the battery (given that the company delivered its first vehicles in early 2008, that warranty period will be up pretty soon for some drivers). Under Tesla’s Battery Replacement Program, new Roadster buyers have an option to pay $12,000 up front (non-refundable) to get a one-time battery replacement after seven years of ownership.

GM’s warranty for the gen-1 Volt battery exceeds the national standard for batteries and other emission-related components (eight years or 80,000 miles). But it’s not enough to earn the model official designation under CARB regulations as what’s called an “enhanced advanced technology partial zero emissions vehicle,” or enhanced AT-PZEV.

Shad Balch, GM’s energy and environment communications specialist, told us this week that GM is aiming to earn that enhanced AT-PZEV designation from California for the 2013 Volt model, partly by offering a 10-year, 150,000-mile warranty on the battery. And like so much in the nascent electric vehicle market, its motivation has to do with government funds.

According to Balch, this particular designation could qualify Volt buyers for a $5,000 purchase incentive. He said GM “knew all along” that it would not earn enhanced AT-PZEV status from the get-go, and noted that the automaker is seeing plenty of demand for the first generation of the Volt without the incentive. “Lack of a government classification won’t change that,” he said. In a couple years, however, “when we get through those early adopters,” Balch said GM is hoping $5,000 shaved off the sticker price will help pave the way for expansion to a broader market.

While Swanton emphasized that it’s too early to say for sure what designation a particular upcoming model will earn, Balch said GM is working to “drum up support” from local and state governments for incentives (related to parking or charging stations, for example) that would be provided specifically for enhanced AT-PZEV models.

It remains to be seen what kind of warranties automakers will offer for the battery in most upcoming plug-in models. But Nissan has said it expects the LEAF battery to maintain around 70-80 percent of its original capacity after a decade, and Mitsubishi’s electric iMiEV carries a 3-year warranty where it’s sold overseas. Fisker says on its website that it plans to offer a “limited bumper to bumper” warranty on its Karma in the U.S. market for 50 months or 50,000 miles.

Coda Automotive is offering a warranty on its upcoming all-electric Coda Sedan (slated to launch in California in 2010) for three years or 36,000 miles, but it plans to cover the 33.8 kilowatt-hour battery pack for longer: eight years or 100,000 miles.

Of course, part of the gamble with products from small, young companies is that who knows if they’ll be around in three, eight, 10 or however many years from now that they’re promising to guarantee a battery.

Down the road, Swanton expects that more automakers will lease batteries separately from electric vehicles so that the cost of the battery becomes “immaterial” to prospective buyers. According to Joby Lafky, senior director of business development and partnerships for smart charging startup GridPoint, alternative ownership schemes for the battery — or reinvention of “what it means to warranty a battery pack” —  will be needed in order for electric vehicles to achieve their potential providing energy storage services for the power grid.

The current “odometer-based warranty” scheme means that if electric vehicle batteries are used to provide grid services (feeding energy into the grid when demand peaks, for example) the battery will degrade and depreciate due to all the charging and discharging, not just mileage, said Lafky. So if the battery gets used up faster, and it’s within the warranty period, the automaker could get stuck paying to replace it.

Image courtesy of GM

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