Baxia Markets
August 22, 2021

General Motors recalls has an estimate cost of $1B

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General Motors Co. recalls more than 73,000 of its Bolt electric vehicles at the cost of $1 billion due to the risk of their batteries catching fire.

The recall is an expansion of a similar action the company took last month when it discovered a defect in the battery that powers the EV. The latest move covers all Bolt EVs and Bolt electric utility vehicles from the model years of 2019 through 2022, the automaker said in a statement.

Faced with the expanding recall, the automaker said it was pressing its battery supplier, South Korea’s LG Chem Ltd., “for reimbursement of this field action.” LG said it was working to ensure that the recall is carried out smoothly.

“The reserves and ratio of cost to the recall will be decided depending on the result of the joint investigation looking into the root cause, currently being held by GM, LG Electronics, and LG Energy Solution,” LG said.

GM warned customers to park their Bolts outside and away from buildings, as well as instructing them not to charge the vehicles overnight. The company said that owners should limit their state of charge to 90%, recharge more often, and not deplete the battery below a range of 70 miles.

“All Chevrolet Bolt electric vehicles are now recalled due to the risk of the high-voltage battery pack catching fire,” the National Highway Traffic Safety Administration said in a statement. “The recall applies to all Bolt vehicles, including those that may have received an earlier recall repair for the fire risk issue.”


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GM fell 2.1% to $47.77 after the close of regular trading in New York. The shares have climbed 17% so far this year, trailing Ford Motor Co.’s 43% advance.

The Detroit-based automaker said it expanded the recall from last month’s level because upon further inspection, it “discovered manufacturing defects in certain battery cells produced at LG manufacturing facilities beyond the Ochang, Korea, plant.”

The flaws include a torn anode tab and folded separator in the battery cell, “which increases the risk of fire,” GM said.

Batteries with modules covered under the new recall will come with an 8-year/100,000-mile limited warranty (or 8-year/160,000 kilometers in Canada).

Expenses related to battery fires had already hit the company’s most recent quarterly results. The company said it had to spend $800 million on a recall issued late last month for almost 69,000 Chevy Bolts due to the risk of fires from defective LG Chem batteries.

The remainder of the 2019 model-year vehicles and 2020 model-year cars weren’t subject to earlier recalls because they used batteries made in the U.S.


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