LG to Pay for Chevy Bolt EV Recall Costs

GM and LG Reach Agreement on Bolt EV Battery Recall Costs

General Motors is facing a substantial battery recall for the Bolt EV, but the financial burden will largely be shouldered by LG. A recent agreement stipulates that LG will cover the vast majority of expenses related to the Chevy Bolt EV and EUV recall.

GM anticipates LG will offset approximately $1.9 billion of the total $2 billion in recall costs. This financial recovery will be reflected in GM’s earnings report for the third quarter.

Details of the Agreement

GM expressed satisfaction with reaching a resolution with LG, characterizing the company as a “valued and respected supplier.” However, the automaker emphasized that the recall stemmed from “manufacturing defects” present in LG-produced batteries.

Specifically, LG identified issues with the anode and cathode-anode separator within the battery packs. These combined defects presented an elevated risk of battery fires.

Impact and Future Outlook

LG has since implemented corrective measures and has resumed battery production. While the immediate financial costs are significant, the reputational damage to both companies may be a more lasting concern.

The recall of GM’s primary electric vehicles, the Bolt EV and EUV, has negatively impacted their standing in the competitive EV market. This situation is particularly challenging for GM.

Future models, such as the Hummer EV and upcoming electric pickup trucks, are intended to rebuild consumer confidence. However, the positive effects of these launches will likely take time to materialize.

Note: This report was originally published on Engadget.