Mercedes May Delay Hybrid SUV Due to Battery Supplier Issues

Mercedes is dealing with some battery supplier issues for its new hybrid, the ML-450.  The new hybrid SUV was supposed to use nickel metal hydride battery packs from Cobasys.  But Mercedes is claiming Cobasys is backing out of the deal because of financial issues caused by their parent companies. 

Mercedes and Cobasys had been negotiating a deal for the battery packs for some time.  Then Cobasys refused to sign the purchase order, putting Mercedes in a difficult position given the scarcity of battery pack producers.  Mercedes is suing to force Cobasys to begin making their batteries.

Complicating matters is Cobasys parent company is Chevron and Energy Conversion Devices, who have 'pulled funding' from their child and are either selling or have already sold it off, which is why they are having trouble meeting their contracts. 

In the lawsuit, Mercedes claims that if Cobasys does not immediately begin production, they may have to pull production of their new hybrid. 

"Without a reliable source for this critical part, [Mercedes] will be unable to produce the hybrid vehicle in accordance with its scheduled launch date, and will likely be forced to cancel the vehicle entirely, or delay the launch for an extend period,"

Mercedes has told ABG that the lawsuit is spelling out a worst case scenario, but they are unlikely to be delayed in their production of the ML-450. 

Mercedes is claiming Cobasys (and Chevron and ECD) hid the deal to sell Cobasys because they felt Mercedes would pull out on the contract.  And now Mercedes is being made to wait to see if the new owners (whoever they are) will wish to honor the deal.

Cobasys has had issues with their hybrid batteries in the past. GM had to recall their mild hybrid fleet of cars and replace the battery packs from Cobasys after a leak was discovered which cut power to the vehicle.  This recall forced GM to put their hybrid batteries into the hybrids they had already built, rather than putting them into the new hybrid cars they were building, causing a serious delay in their production numbers.

It was such a bad situation, that GM considered buying Cobasys (which makes me wonder if they are the mysterious new owners?).

Mercedes, unlike the other automakers, actually expects to make a profit from their hybrids right away simply because they can sell their cars for more money than others can.