LG to Pay GM $1.9 Billion for Battery Defects That Caused Bolt’s Recall

LG Electronics will pay General Motors $1.9 billion to cover almost the entire cost of the recall of the fire-prone batteries in its Chevrolet Bolt electric car, which has become a major problem for the automaker, the companies said on Tuesday.

GM has recalled all 141,000 Bolts it has produced since the car’s launch a few years ago to replace flammable battery packs due to manufacturing defects. The automaker, which aims to replace all its petrol cars and trucks with zero-emission vehicles by 2035, said the recall would cost $2 billion.

Shilpan Amin, the automaker’s vice president of global purchasing and supply chain, said in a statement that GM and LG are working on producing new battery modules and expect to start installing them in customer vehicles later this month.

“LG is a valued and respected supplier to GM and we are pleased to reach this agreement,” he said.

The recalled Bolts use battery packs made by LG in South Korea. GM has issued two limited recalls for the car after reports that the vehicles caught fire after being fully or nearly fully charged. In September, GM extended the recall to all Bolts sold in the United States, South Korea, and other countries. The two companies traced the fires to two manufacturing faults, which occurred in rare cases.

GM plans to launch 30 new electric vehicles over the next four years, including 20 in the United States. These models will use a new type of battery pack designed by GM and under construction in Ohio and Tennessee by a GM-LG joint venture that plans to build several more in North America this decade.