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GM To Take $1Bln Hit With Expansion Of Chevy Bolt EV Recall Over Fire Risk


08/21/2021


GM To Take $1Bln Hit With Expansion Of Chevy Bolt EV Recall Over Fire Risk
General Motors Co is expanding recall of its Chevrolet Bolt electric vehicles because of reports of risks of fires from the high-voltage battery pack and as a result will take a hit of $1 billion, the company said on Friday.
 
According to analysts, this will deal a blow to the efforts to boost sale of electric vehicles of the largest automaker of the United States.
 
The issue also prompted an indefinite halt of sale of its electric vehicles, said the Detroit company, while it will also ask for a reimbursement for the batteries that were supplied by LG. About 73,000 vehicles from model years 2019 through 2022 are covered by the latest recall.
 
“The reserves and ratio of cost to the recall will be decided depending on the result of the joint investigation looking into the root cause, currently being held by GM, LG Electronics and LG Energy Solution,” LG said in a statement, referring to its subsidiaries.
 
The South Korean battery maker is working closely with its client and partners to that the recall measures are carried out smoothly, LG added.
 
The second quarter operating profits were cut down by South Korea's LG Electronics Inc earlier this month by a fifth to account for the costs of recalls by GM. The battery modules at the centre of the GM recalls were supplied by LG Electronics and the modules were made with cells produced by LG Chem's wholly owned battery subsidiary LG Energy Solution (LGES).
 
About $900 million would be spent by Hyundai Motor Co for replacing LG batteries for about 82,000 of the company’s electric vehicles because of fire risks, the company had announced earlier this year.
 
All remaining Bolt vehicles that were not included in its previous recall in July will be included in the recall. GM said on Friday. Defective battery modules in Bolt EVs and EUVs will be replaced with new modules, GM said. This $1 billion hit to the company is on top of the $800 million that the company had said would have to be incurred for its previous recall.
 
Ultium Cells LLC is a joint venture between GM and LGES which currently is constructing a battery cell plant in Ohio and Tennessee and the venture plans to build two more facilities later on. When GM will launch the electric Hummer and Cadillac vehicles over the next year, a different-generation battery will be used by it, GM has said.
 
A recall for almost 69,000 Chevrolet Bolts was made by GM in July for fire risks following reports of two incidents of fire. At that time, GM had said defective battery modules would be replaced by it as needed. That recall was expanded by the auto company in its latest recall.
 
Until the recall and the replacement is completed, GM will not sell any new Bolt cars. GM has also said that it is "working aggressively with LG to increase (battery module) production as soon as possible."
 
(Source:www.ndtv.com)