LG to pay most Bolt battery recall costs in deal with GM

Kalea Hall
The Detroit News

Detroit —  General Motors Co.'s Chevrolet Bolt battery supplier LG Electronics Inc. has agreed to front the majority of the cost associated with recalling all of the electric vehicles for battery fire risk, the Detautomaker said Tuesday. 

GM estimates the recall will cost $2 billion and the automaker made an agreement with LG to recover $1.9 billion of that. The costs are mostly associated with battery module replacements, and the estimate could change depending on the number of modules GM has to replace. The cost has gone up slightly from GM's original estimate of $1.8 billion. 

The reimbursement will be noted in GM's third-quarter earnings to be released Oct. 27.

GM in August expanded its Bolt EV recall to include every one ever made since production started in late 2016, plus the Bolt EUV introduced this year — more than 141,000 — after a small number had their batteries catch fire. The automaker has confirmed 13 fires so far. 

GM and supplier LG Energy Solution, along with affiliate LG Electronics, found that two "rare" manufacturing defects — a torn anode tab and folded separator — were the root cause of the battery fire risk. LG Energy Solution supplied the cells for the Bolts and LG Electronics supplied the battery modules and packs. 

“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. “Our engineering and manufacturing teams continue to collaborate to accelerate production of new battery modules and we expect to begin repairing customer vehicles this month.”

In September, GM said it would start accepting battery supply from LG and replacement battery modules for recalled Bolts would begin shipping to dealers as early as mid-October.

GM plans to replace battery modules in all Bolts included in a first recall round, which included model years 2017 to 2019. In the expanded recall this summer of 2020-22 Bolt EVs and Bolt EUVs, GM said it would replace all defective modules, but until it figures out how to determine if a module is defective, it will replace all of them.

GM confirmed Tuesday it has started shipping modules to dealers and repairs will begin shortly. 

GM is launching by mid-November a new diagnostic software package to alert customers of potential battery module abnormalities that will eventually allow Bolt customers to charge to a 100% full battery after all diagnostic processes are complete. Bolt customers are currently instructed to only charge to 90% because of the battery fire risk.

Meanwhile, GM is still moving forward on its aggressive EV plans, pushing for an emissions-free lineup by 2035 and selling 1 million EVs globally by 2025. Last week, GM told investors it expects to grow its EV revenue from about $10 billion in 2023 to $90 billion annually by 2030.