American automaker General Motors expanded its recall of Chevrolet Bolt electric vehicles on Friday due to fire risks from battery manufacturing defects. According to the automaker, it will seek compensation from LG Chem (its battery cell manufacturer partner) for losses of $1 billion.
LG Chem’s shares dropped by 11% Monday after the announcement of the third recall GM issued regarding this vehicle. The stock market lost $6 billion due to the loss in value. GM shares closed down 1.27%
It’s not the first recall of LG Chem’s battery by automakers. Hyundai recalled 82,000 EVs earlier this year due to a similar fire risk. The recall cost was approximately $851.9million. Hyundai formed a joint venture with LG Energy Solution to recall 82,000 EVs. This was the battery unit that LG Chem owns. Experts fear the IPO may be delayed by the recall cost.
GM discovered battery defect in its batteries during an investigation. This included a folded separator and a torn tab. This recall follows a fire that engulfed a Volkswagen AGID.3 EV equipped with an LG Energy Solution lithium-ion battery. As well as Tesla earlier this year, Volkswagen began to move away from LG Chem’s pouch-type lithiumion batteries and toward prismatic-type cells like those manufactured by CATL or Samsung SDI.
GM is now without fully-electric vehicles in North America. This means that it cannot compete with Tesla or other automakers, as EV sales continue to rise. GM might decide to move its operations elsewhere due to the loss of sales and safety concerns.
There is still much to do together. GM stated that it would replace the defective batteries in its Chevy Bolt EVs or EUVs with the new ones. This is in response to the company’s $1 billion loss. These costs are in addition to the $800million GM spent last November on the Bolt recall. According to Cairn ERA data, the cost of a battery pack is $186 per kWh. GM charges $169 for a kWh and Bolt uses a 66 kWh pack.
LG Chem and GM didn’t respond to comments, making it unclear whether they will continue to pursue plans to construct a second U.S.-based battery factory in Tennessee. Ultium Cells is the name of the joint venture. It aims to generate more than 70 gigawatts (GWh) of energy.
Publiated at Tue 24 August 2021, 01:19.03 +0000