LG Electronics will reimburse about $1.9 billion (€1.644 billion) to General Motors for costs and expenses associated with the recall of the Chevrolet Bolt EV and EUV models due to manufacturing defects in the battery modules supplied.
As a result of the agreement, according to a statement from the US automaker, the company estimates a recovery of its profits in the third quarter that will offset the 2,000 million dollars (about 1,730 million euros) of charges associated with the withdrawal and revision of these models.
It is noteworthy that initially, GM recalled around the world about 69,000 Bolt EVs of the 2017 to 2019 models to solve the battery problem and estimated that the defect would cost about 800 million dollars. However, on August 20, GM announced the expansion of the Bolt EV recall to cover 73,018 vehicles in North America, from 2019 to 2022 models, which would entail additional expenses of 1,000 million dollars.
Faced with this situation, GM said it will replace the defective battery modules, which were produced by LG in South Korea with two problems: a torn anode and a bent separator, which increases the risk of fire of the batteries.
According to Shilpan Amin, vice president of Global Purchasing and Supply Chain of the North American company, "LG is a valuable and respected supplier to General Motors and we are pleased to reach this agreement."
"Our engineering and manufacturing teams continue to collaborate to accelerate the production of new battery modules and we look forward to starting repair customers' vehicles this month."
The American manufacturer has announced that by 2025 it plans to introduce at least 30 electric models in which it will invest a total of 27,000 million dollars.
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