Autos Weekly: Is Toyota Off the Hook?

It was a week full of surprises in the global auto business, none bigger than Thursday's bombshell announcement of a new CEO for General Motors, its fourth leader in less than two years. But there was much more going on -- here are a few of the stories you might have missed.

Maybe those Toyota drivers really were at fault
Toyota's (NYSE: TM  ) suggestion several weeks ago that driver error was the cause of most of the unintended-acceleration incidents might not have been the best PR move, but it might have been accurate: A National Highway Traffic Safety Administration report released on Tuesday said that brakes weren't applied at all in at least 35 of 58 of the Toyota crashes blamed on unintended acceleration, according to data from the vehicles' "black box" recorders.

These findings were preliminary and come with some caveats -- among them, that Toyota's cars have only had black-box sensors since 2007 (many of the problem vehicles are older), and that the black boxes are built into the cars' airbag systems and don't typically begin recording until the airbag is deployed.

To its credit, Toyota didn't rush out and declare victory, instead calling for independent corroboration of the government's findings via other methods, like examination of the wrecked cars. But the government's early findings have to be gratifying for the automaker (and its shareholders), which has recalled a total of 9.4 million vehicles worldwide for issues related to unintended acceleration.

Tata hits new highs
Shares of India's Tata Motors (NYSE: TTM  ) , owners of the venerable Jaguar and Land Rover brands, rose to their highest levels in 19 years this week after the company posted a solid first-quarter profit. Net income for the quarter was 19.9 billion rupees ($430 million), versus a loss of 3.3 billion rupees for the same period a year ago.

Jaguar Land Rover was a big part of the story for Tata, with the unit's worldwide sales up a whopping 59% over the second quarter of 2009. Jaguar's sales have been so solid, in fact, that one of the key issues facing the luxury automaker is a shortage of engines. Jaguar's engines are produced by Ford (NYSE: F  ) , a legacy of the Dearborn, Mich., automaker's longtime ownership, and the company is working with Ford to boost supplies, it said on Tuesday. Tata also said it is considering a Chinese factory for Land Rover and is presently in talks with potential joint venture partners in that country.

Tesla's trash talk
Tesla Motors (Nasdaq: TSLA  ) CEO Elon Musk isn't known for keeping his opinions to himself, so it didn't come as much of a surprise this week when he slammed the battery technology Nissan is set to employ in its upcoming all-electric Leaf sedan.

According to Musk, the air-cooling method used by Nissan's battery pack design is "primitive" compared to Tesla's liquid-cooled battery packs. Air-cooled systems use fans to dissipate heat, and can be challenged in excessively hot (or cold) weather. Musk predicted that the Leaf would experience "huge degradation" in the cold and essentially shut itself down in hot weather.

I hear what Musk is saying, but I have to say I'm skeptical of his trash talk here. Like all major automakers, Nissan does extensive and harsh testing of every vehicle it develops, and a hugely important car like the Leaf was surely not an exception. And -- easy potshot here -- it's entertaining to hear a start-up CEO whose cars are powered by commodity cells from laptop batteries call a purpose-built power train from a major automaker "primitive."

Also, dude, your sedan is two years away from market. Nissan's will be out before the end of the year. If you think you know what Nissan (not to mention Ford, Toyota, GM, Honda (NYSE: HMC  ) , and VW) will be doing technologically two years from now, you're fooling yourself.

Long story short, Musk has seemed prone to underestimating his competition in the past, and this outburst might be more of the same. But it's not impossible that Musk will have the last laugh, at least on this front. General Motors has done extensive real-world testing of prototypes in both hot deserts and Arctic conditions for years (as a GM engineer I once met put it, "Our cars have to work in both Alaska and Arizona"), and its engineers chose a liquid-cooling system for the battery pack in the Chevy Volt.

Still thinking about buying Ford? Dave Mock says the Dearborn giant just got a big upgrade.

Fool contributor John Rosevear owns shares of Ford, which is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


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  • Report this Comment On August 18, 2010, at 8:43 PM, baldheadeddork wrote:

    John, I'm pretty sure the cases in the NHTSA/Toyota investigation were limited to cars that were outside the sticky accelerator or floor mat issues. This is being spun by Toyota and picked up by a lot of the press as a vindication, but the real read should be "Excluding all the cars where we clearly did eff up, there isn't evidence of further problems." Fine as far as it goes, but a hell of a ways from saying that most of the accidents were driver error.

    About Tesla - I'm waiting for someone to ask Musk exactly how his Apple and Google magic are going to help him develop a luxury car for less than the 1-1.5 billion dollars it takes companies that know what they're doing. But Jerry Flint is dead so I'm not holding my breath.

    They're not single-handedly supporting the entire PR industry like Tesla, but I still say Fisker is infinitely more likely to actually get a car of their own design into production.

  • Report this Comment On August 31, 2010, at 1:31 PM, TMFKris wrote:

    Even if the brakes weren't applied (assuming the driver had time to do this before crashing into something), that wouldn't absolve Toyota from the repercussions of selling a car that can accelerate without warning. It would be more like Toyota got lucky in the cases where the driver was able to override the faulty machine

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