Report: LG Chem To Cover 70% Of Cost For Hyundai's EV Battery Recall
The costly recall will eat a significant part of profits for both companies.
LG Chem’s LG Energy Solution is expected to cover 70% of costs related to the large global battery recall of roughly 82,000 Hyundai electric vehicles.
The news comes from Yonhap news agency and South Korean media (via Reuters) and is not a big surprise, as some analysts expected that LG Chem will have to pay the majority of the bill.
The recall includes mostly Hyundai Kona Electric (75,680), but Hyundai IONIQ Electric and Hyundai Elec City electric buses are also included.
The total cost of the recall (including the previous BMS recall) is estimated at 1 trillion won ($900 million), which would mean that LG Chem will pay $630 million, and the remaining $270 million will fall on Hyundai.
For comparison, LG Chem’s LG Energy Solution operating profits in 2020 were estimated at 388 billion KRW ($350 million).
The time will tell whether the final ratio will really be 70%/30% and how it might influence the case of 68,677 Chevrolet Bolt EVs. So far GM is not recalling batteries and we saw reports that the company seeks for a software solution pointing out that the cells (also from LG Chem) are slightly different.
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