Sunday, October 17, 2021

LG to pay up $1.9B to General Motors over Chevy recall

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LG Electronics has agreed to pay General Motors $ 1.9 billion to cover the costs of a Chevy Bolt EV manufactured by a South Korean supplier that could cause the batteries to catch fire.

GM has spent $ 2 billion to retrieve and repair each Chevy Bolt car it has produced since it began production in 2016.

The contract with LG covers almost all costs.

“LG is a valuable and respected supplier to GM, and we are delighted to have reached this agreement,” said Shilpan Amin, GM’s Vice President of Global Procurement and Supply Chain.

“Our engineering and manufacturing teams continue to work together to accelerate the production of new battery modules, and we will begin repairing customer vehicles this month.”

General Motors said in a statement that the owner of the Chevy Bolt had to park his car outside and away from their homes after several cars caught fire.
General Motors said the cost of recalling and repairing the Chevy Bolts cost the company nearly $ 2 billion.
General Motors said the cost of recalling and repairing the Chevy Bolts cost the company nearly $ 2 billion.

GM first remembered the Chevy Bolts in 2020 about faulty batteries, but then had to call a second time after some of the cars they repaired still burned out.

In July, a week before the second call, GM and federal regulators called on owners to stop Chevy bolts outside and away from their homes because of the risk of fire.

The National Road Safety Administration said at the time that the batteries in the 2017-2019 Bolt EVs were “likely to smoke and catch fire inside.”

General Motors called for the first time in 2020 because the batteries failed, but a new call was made because the repaired batteries still caused the car to burn out.
General Motors called for the first time in 2020 because the batteries failed, but a new call was made because the repaired batteries still caused the car to burn out.

The NHTSA warned that the fire could spread to the rest of the car and cause a fire if the car was parked in a garage or near a house.

GM shares rose sharply above the news and last rose 1 percent in market trading.

The NHTSA launched an investigation into the matter in October last year and recalled 51,000 damaged vehicles in the U.S. in November.

General Motors said Chevy Bolts will not resume production until the battery problem is resolved.
General Motors said Chevy Bolts will not resume production until the battery problem is resolved.

However, after the first call, there were at least 10 fires in Bolts, including one when the car was charging at the home of a Vermont lawmaker, according to Acesparks.

GM said in September that Bolt would not resume production or sales if the recall vehicle solves the fire hazard problem.

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