LG Will Pay $1.9 Billion To GM Over Bolt EV Recall

The Bolt EV recall could not have come at a worse possible time for General Motors. Though there is never a good time for an automaker to go through a massive recall, is there? GM is already dealing with supply chain issues due to the coronavirus (COVID-19) pandemic and the global chip shortage; So, having their volume electric vehicle spontaneously burst into flames is not a great way to recover.

Luckily, for GM, they have reached an agreement with their battery supplier to cover the cost of the Bolt EV recall.

GM and LG reach agreement over Bolt EV recall costs

2019 Chevrolet Bolt EV in burgandy. This is one of the many cars involved in the Bolt EV recall
2019 Chevrolet Bolt EV | Chevrolet

GM sourced the batteries for the Bolt EV from LG Electronics. The batteries also happen to be the main cause for spontaneous fires which resulted in a recall of 143,000 Bolt models. Considering the significant liability risk, GM had no problem pointing the finger at LG when facing backlash from their angry customers.

The Bolt EV recall was estimated to result in $2 billion in losses for GM. Naturally, the automaker was not interested in shouldering that cost.

According to Automotive News, LG has agreed to reimburse GM $1.9 billion after GM’s leadership met with the battery supplier. That amount covers almost 100% of the cost that GM took on from the Bolt EV recall. This agreement effectively shows that LG is taking responsibility for the recall and the blame for the faulty batteries.

Despite LG’s faulty batteries being the cause of the recall, GM has said that they will continue their partnership with the battery supplier going forward.

“LG is a valued and respected supplier to GM, and we are pleased to reach this agreement,” said Shilpan Amin, GM vice president, global purchasing and supply chain. “Our engineering and manufacturing teams continue to collaborate to accelerate production of new battery modules, and we expect to begin repairing customer vehicles this month.”

GM had to warn Chevy Bolt owners not to park indoors overnight

2019 Chevrolet Bolt EV charging
2019 Chevrolet Bolt EV charging | Chevrolet

Because the fires in the EV Bolt seem to be random, GM had to do quick damage control to mitigate any damage done by spontaneous combustion. Once the automaker was aware of the fires, they instructed Bolt owners not to park indoors in a garage or parking structure. GM also warned owners not to charge their cars overnight, which is a common practice among EV owners so that their vehicles are ready for their daily commute in the morning.

It is not hard to imagine that Bolt EV owners were frustrated with the situation. Every time they drove their vehicle, they had to worry about it potentially bursting into flames without warning. Eventually, that frustration welled up into an outcry, possibly contributing to the Bolt EV recall.

Chevy Bolt owners demanded that GM buyback their defective vehicles

When the Detroit Free Press interviewed Chevy Bolt owners about the continuing battery fire situation, they responded with understandable anger. Owners were afraid to park their cars near their own homes or near other cars.

One owner referred to their Bolt as a “firebomb.” The stressed-out customers wanted GM to buy back their vehicles. It is unclear if the Bolt EV recall goes that far, but we would not be surprised to see a class-action lawsuit rise from this debacle.

At this point, it is not certain if GM’s agreement with LG to cover the Bolt EV recall will also cover any settlements that result from possible lawsuits.

RELATED: Chevy Bolt Owners Are Driving Around With Smoke Detectors Strapped To Their Cars