LG To Pay GM Up To $1.9B For Supplying Faulty EV Batteries
LG Group, the South Korean electronics and chemicals giant, is reimbursing a significant amount of money for supplying faulty batteries to one of its biggest customers, American automaker General Motors (GM). It’ll reimburse GM up to $1.9bn to cover the costs of the automaker’s massive recall of its Chevy Bolt electric cars containing LG batteries.
- Apparently, LG supplied faulty battery modules to GM for use in its Bolt EVs. These faulty batteries made all Bolts a significant fire risk that caused GM to organize a total recall, costing the American automaker a considerable sum.
- Because of the fault found with LG’s batteries, the Korean company negotiated with GM and agreed to cover the majority of costs of the automaker’s total recall. While the final recall costs haven’t been set, GM has said it’ll offset $1.9bn of the $2bn in charges associated with the recall in its next quarterly report, implying LG could pay up to that amount.
- Separately, two LG Corp. companies, LG Energy Solution and LG Electronics, have booked a combined 1.1 trillion Korean won ($1.2bn) in costs for the recalls. By August, uncertainty about the recall costs had delayed the process of a public listing for LG Energy, but the process has been reinstated, LG said.
- With the settlement, GM and LG Chem remain on friendly terms and will continue to work together. This month, LG resumed production of new battery modules to replace the faulty ones in the recalled Chevy Bolt EVs.
GM confirmed that 13 Chevy Bolt cars caught fire due to battery faults but no deaths were recorded. It recalled over 140,000 units to replace the batteries and has begun the replacement work.