Should GM Shareholders Brace for a Battery Debacle?

General Motors’ (NYSE:GM) Chevy Volt is “under fire” after its lithium-ion batteries actually caught fire in crash tests. The issue may remind shareholders of Toyota Motors (NYSE:TM) recent quality control troubles.

US Regulators decided to conduct an investigation after a Chevy Volt parked in a test facility parking lot caught fire three weeks after being involved in a side impact crash test on May 12. The National Highway Traffic Safety Administration released a statement on its website yesterday reporting that Volt battery packs were damaged in three more tests last week, causing two fires.

“The agency is concerned that damage to the Volt’s batteries as part of three tests that are explicitly designed to replicate real-world crash scenarios have resulted in fire,” NHTSA said in the statement per Bloomberg. The regulatory agency also said it was not aware of any crashes outside of the test environment that had resulted in fires and Volt owners who had not been involved in any serious accidents need not worry. The same goes for all vehicles that run on the questioned lithium-ion batteries.

Greg Martin, a GM spokesperson, maintains that the vehicles are safe and that the NHTSA had been working for weeks to successfully replicate the initial incident involving the test vehicle on May 12. The Volt has been on the market just one year and GM is currently planning on increasing the model’s production numbers to 60,000 next year. Through October GM had sold 5,003 units, largel appealing to advocates of the new electric hybrid technology.