LG Electronics to pay GM $ 1.9 billion for default on batteries

LG Electronics agreed to pay $ 1.9 billion to General Motors (GM) for costs related to the recall of the Chevrolet Bolt EV electric model whose batteries, manufactured by the South Korean company, are defective and have caused the fires of several vehicles.

GM announced in a statement that the agreement with LG Electronics will allow the US automaker to recover almost all of the 2 billion dollars it will cost to repair the vehicles.

The manufacturer also said it expects to start repairs this month.

GM has had to recall all Chevrolet Bolt EVS, the company’s main electric vehicle so far, produced since 2016 due to a defect in the battery modules supplied by LG Electronics.

The reimbursement of the 1.9 billion dollars will be reflected in the results of the third quarter of the year, reported GM.

“LG is a valued and respected supplier to GM and we are pleased with the agreement. Our engineering and manufacturing teams continue to collaborate to accelerate the production of new battery modules and we look forward to beginning vehicle repairs this month,” said the vice president of GM for purchasing and supplies, Shilpan Amin.

Initially, GM called for a worldwide overhaul of some 69,000 Bolt EVS from the 2017 to 2019 models to fix the battery problem, estimating that the defect would cost about $ 800 million.

But 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 mean additional expenses of $ 1 billion.