LG Electronics has agreed to pay 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 single one since production began in 2016. Fixing the vehicles, including completely replacing some batteries entirely, is expected to cost $2 billion, GM said Tuesday.
The settlement is a big win for the automaker, which missed Wall Street’s in the second quarter precisely because of the costs it had set aside for the recall.
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.