LG ring fences KRW326bn for Chevrolet Bolt costs

August 11, 2021 (Last Updated August 11th, 2021 11:31)

Battery maker has made provision for the high cost of a GM recall.

LG ring fences KRW326bn for Chevrolet Bolt costs
LG has settled with GM over the Chevrolet Bolt battery recall

LG Electronics and LG Chem said they had set aside a combined KRW326bn (US$282m) to cover costs relating to the General Motors recall of the Chevrolet Bolt electric vehicle (EV).

Last month GM announced a second recall of the EV worldwide due to the risk of battery fires after at least two vehicles repaired under the first recall burst into flames.

The recall affects around 69,000 vehicles produced between 2017 and 2019, including 51,000 in the US.

The automaker also warned owners not to park their Bolt EVs inside or charge them unattended overnight. It confirmed a second “rare manufacturing defect” had been detected in the vehicle which increases the risk of fire.

The batteries were supplied by LG Energy Solution, a subsidiary of LG Chem, from a factory in South Korea.

LG Electronics said in a filing its revised second-quarter earnings reflected a KRW235bn provision for the Bolt recall while LG Chem booked a KRW91bn provision.

The two companies said they were working with GM to analyse the fire risks and warned their provisions could change depending on the recall process and the results of the investigation.