LG will pay up to $1.9 billion to General Motors for Bolt EV battery fires
A 2019 Chevrolet Bolt EV caught fire at a home in Cherokee County, Georgia on September 13, 2021, according to the local fire department.
Cherokee County Fire Department
LG Electronics has agreed to pay General motors Up to $1.9 billion to recall Chevrolet Bolt electric cars due to fire risks caused by defective batteries supplied by the South Korean supplier.
Problems with the Bolt – the company’s flagship electric vehicle – have led the automaker to recall every electric car since production began in 2016. Repairing the vehicles, including replacing some batteries entirely, is It is expected to cost $2 billionGeneral Motors said Tuesday. This is higher than the previous estimate of $1.8 billion.
Compromise between companies is a huge benefit to the auto industry, which Missed Wall Street predictions In the second quarter due to spare recovery costs.
As a result of the agreement, GM will recognize an estimated recovery in the third quarter that will offset $1.9 billion of the $2.0 billion in fees associated with recalls.
Manufacturing problems occurred at LG Battery Solution plants in South Korea and Michigan. A “rare manufacturing defect” in Bolt EVs is a torn anode tab and folded spacer that when in the same battery cell increases the risk of fire, according to GM.
“LG is a valuable and respected supplier to General Motors, and we are delighted to have reached this agreement,” Shilpan Amin, GM’s vice president of global purchasing and supply chain, said in a statement. “Our engineering and manufacturing teams continue to collaborate to accelerate production of new battery units and we expect to begin repairing customer vehicles this month.”