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LG Electronics to reimburse GM with $1.9B for faulty batteries

PUBLISHED ON 2021-10-12 23:18:00 EST Yashasvini



-- The reimbursement is expected to cover up the expenses associated with the recall of Chevrolet Bolt EVs.

-- Thirteen separate cases of the Bolt EV catching fire, were reported across the globe after which GM suspended the production of the vehicle at its Michigan assembly.

LG Electronics has agreed to pay General Motors (GM) up to $1.9 billion to cover the expenses associated with the recall of Chevrolet Bolt EVs due to fire risks caused by faulty batteries provided by the South Korean supplier.

GM has recalled every car manufactured since 2016 to fix the vehicles. In some cases, the automaker would replace some batteries entirely. The entire process is expected to cost around $2 billion, said the automaker.

GM’s vice president of global purchasing and supply chain, Shilpan Amin, said, “LG is a valued and respected supplier to GM, and we are pleased to reach this agreement. 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.”


GM first recalled the Chevrolet Bolt EVs over the faulty batteries in 2020. The company issued a second recall after some of the cars that had already been repaired still erupted into flames.

Reports of 12 fires and three injuries caused GM to halt production at its Michigan Assembly plant for at least a month, until October 15. The automaker identified the problems to be a torn anode and a folded separator, both of which needed to be present in the same battery cell for a fire to occur.

GM had then said that it won’t resume production or sales of Bolt until it is not fully satisfied that the recall remedy will take care of the fire risk issue.

Earlier, in August, the company recalled more than 140,000 Bolt vehicles to replace battery modules.

READ MORE: GM extends production halt of Chevrolet Bolt amid safety hazard


GM and LG are planning to build two battery plants in the U.S. through a joint venture called Ultium Cells LLC. The plants in Ohio and Tennessee will produce GM’s next-generation batteries called Ultium.

GM intends to relaunch an all-electric version of the Hummer this fall and needs to ensure that the issues with the Bolt EVs don’t seep into the Ultium batteries.

GM intends to offer electric vehicles exclusively by 2035. The launch of Ultium batteries is highly anticipated as the company’s entire Ultium system, which includes platforms, motors, and other components, is expected to underpin every EV for GM in the future.

ALSO READ: GM intends to double its revenue to $280 billion by 2030

Picture Credits - Fortune

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