General Motors to get $1.9bn compensation from LG for Chevrolet Bolt recall
General Motors (GM) said that it has reached a consensus with LG Electronics under which the latter will compensate $1.9 billion for the expenses and costs related to the recalls of Chevrolet Bolt electric vehicles (EVs) and electric utility vehicles (EUVs).
The Chevrolet Bolt EVs and EUVs were recalled because of manufacturing defects in battery modules provided by LG Electronics.
In August 2021, General Motors had expanded a previous vehicle recall to 140,000 plus Chevrolet Bolt electric vehicles sold around the world since 2016 due to a battery manufacturing defect that could result in the vehicles catching fire.
General Motors to get $1.9bn compensation from LG to bear costs associated with the recall of Chevrolet Bolt EVs and EUVs. Photo courtesy of General Motors.
In the wake of the agreement with LG Electronics, General Motors will record an estimated increase in its earnings for the third quarter. This will offset most of the $2 billion in charges it had incurred owing to the vehicle recalls.
Shilpan Amin — General Motors vice president of Global Purchasing and Supply Chain said: “LG is a valued and respected supplier to GM, and we are pleased to reach this agreement.
“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.”