LG to pay up to $1.9 billion to General Motors over Bolt EV battery fires
A 2019 Chevrolet Bolt EV caught fire at a home in Cherokee County, Georgia on Sept. 13, 2021, according to the local fire department.
Cherokee County Fire Department
LG Electronics has agreed to reimburse General Motors up to $1.9 billion to recall Chevrolet Bolt EVs due to fire risks caused by faulty batteries provided by the South Korean supplier.
Problems with the Bolt – the company’s flagship mainstream EV – have led the automaker to recall every one of the electric cars since production began in 2016. Fixing the vehicles, including completely replacing some batteries entirely, is expected to cost $2 billion, GM said Tuesday. That’s up from a previous estimate of $1.8 billion.
The settlement between the companies is a major win for the automaker, which missed Wall Street’s expectations in the second quarter due to setting aside costs for the recall.
As a result of the agreement, GM will recognize an estimated recovery in the third-quarter that will offset $1.9 billion of $2.0 billion in charges associated with the recalls.
The manufacturing problems occurred at LG Battery Solution’s plants in South Korea and Michigan. The “rare manufacturing defects” in the Bolt EVs are a torn anode tab and folded separator that when present in the same battery cell increase the risk of fire, according to GM.
“LG is a valued and respected supplier to GM, and we are pleased to reach this agreement,” said Shilpan Amin, GM vice president of global purchasing and supply chain, in a statement. “Our engineering and manufacturing teams continue to collaborate to accelerate production of new battery modules and we expect to begin repairing customer vehicles this month.”