Mercedes May Cancel Hybrid SUV Plan Due To Chevron Dispute

[tinrobot]

Mercedes-Benz may be forced to cancel plans to produce its first hybrid sport utility vehicle for the U.S. market because oil giant Chevron and a partner have pulled funding from the automaker's sole supplier of electric batteries needed to power the vehicle, InformationWeek has learned.

The situation threatens Mercedes' plan to roll out a hybrid SUV called the ML-450 next year at its plant in Vance, Ala. It was not immediately clear if Mercedes, a unit of Daimler, would have to cut jobs at the plant -- which Mercedes said Friday will reduce its output of gas-only vehicles this year -- if the problem isn't soon resolved. Mercedes officials did not immediately return a call seeking comment.

On Friday, Daimler reported that sales of Mercedes vehicles in the United States rose 11.6% in July.

Mercedes last year agreed to procure nickel-metal hydride (NiMH) batteries for the ML-450 from Orion, Mich.-based Cobasys, which is jointly owned by Chevron and Energy Conversion Devices. Mercedes now claims that Cobasys is refusing to honor the agreement because it's cash starved and on the block.

According to a lawsuit that Mercedes filed this week, Chevron and ECD quietly pulled funding from Cobasys in December and are now either close to selling -- or have in fact sold -- the company.

http://www.informationweek.com/news/management/legal/showArticle.jhtml?articleID=209901592&subSection=News

[NNadir]

1. Wow. Humanity is near death because of this.

I am beside myself with grief when I think of all the farmers in Bolivia who will die because they cannot get a Mercedes hybrid SUV.

[tinrobot]

2. I think the more interesting tidbit from this is Chevron...

They're apparently keeping NiMH batteries off the market so companies can't make vehicles with better fuel economy.

I'm sure the Bolivians don't care, but anyone who sells oil would be pretty happy with low fuel economy.

[DCKit]

3. I wonder if the patents (the reason Chevron bought the company to begin with)...

are being sold along with the company.

Gotta wonder if Chevron will use the cash to attempt the hostile takeover of one of the Li-ion battery companies (A123, Altair, etc...), pay it out to the executives in bonuses or declare a dividend.

I realize Mercedes lost a bundle on Chrysler, but someone's got to have the cash to license an appropriate technology and produce a battery to get past the technology hump that stands between "good enough" and "Woo-Hoo!"