Photo: GM and Vermont State Police
Although GM still keeps to itself the reason for the Chevy Bolt EV fires, it has finally decided to do the right thing and replace the defective battery packs. In its Q2 2021 earnings call, the company finally revealed how much it would spend to fix each of the affected 68,667 cars: about $11,650.
That’s how much the company’s provision for these repairs interfered with its financial results. To be more specific, GM said it only had a net income of $2.8 billion because it would have an expense of 1.3 billion in warranty recall costs. Of those $1.3 billion, $800 million are only for the Bolt EV.
If you remember, that’s another connection that GM has with Hyundai’s battery fire issues with the Kona Electric. The main one is that both companies bought these battery packs from LG Chem, now renamed LGES (LG Energy Solution). Hyundai said it would spend 1 trillion won ($875 million at the current exchange rate) on replacing the defective battery packs in its EVs.
According to rumors none of the parties will discuss, the difference is that LGES would bear 70% of the expenses. In GM’s case, we have no idea if LGES will also help with the expenses or if the American carmaker will bear all of them on its own.
GM may eventually conclude that not all of these 68,667 Bolt EVs have the combination of “two rare manufacturing defects” that would cause the fires. Some cars may not need the replacement, but owners will probably want it anyway. After all, they have no idea what these defects are nor how to be sure their cars do not present them.
With this issue, whatever it was, GM must have learned a hard lesson. While the Bolt EV was supposed to be more than a compliance car, the company certainly lost money with it after having to replace all these battery packs. If it really wants to electrify its lineup and make money with electric motors and battery packs, GM has to ensure that does not happen again – at all costs.
If you remember, that’s another connection that GM has with Hyundai’s battery fire issues with the Kona Electric. The main one is that both companies bought these battery packs from LG Chem, now renamed LGES (LG Energy Solution). Hyundai said it would spend 1 trillion won ($875 million at the current exchange rate) on replacing the defective battery packs in its EVs.
According to rumors none of the parties will discuss, the difference is that LGES would bear 70% of the expenses. In GM’s case, we have no idea if LGES will also help with the expenses or if the American carmaker will bear all of them on its own.
GM may eventually conclude that not all of these 68,667 Bolt EVs have the combination of “two rare manufacturing defects” that would cause the fires. Some cars may not need the replacement, but owners will probably want it anyway. After all, they have no idea what these defects are nor how to be sure their cars do not present them.
With this issue, whatever it was, GM must have learned a hard lesson. While the Bolt EV was supposed to be more than a compliance car, the company certainly lost money with it after having to replace all these battery packs. If it really wants to electrify its lineup and make money with electric motors and battery packs, GM has to ensure that does not happen again – at all costs.
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