Hyundai-LG Conflict Over '1 Trillion Kona EV Recall Cost'

LG Energy Solution Actively Refutes Battery Blame as Cause of Fire

Source: Ministry of Land, Infrastructure and Transport

[Asia Economy Reporter Changhwan Lee] Tensions are rising between Hyundai Motor Company and LG Energy Solution over the recall related to Kona EV (electric vehicle) fires, which amounts to about 1 trillion won. While the government and Hyundai point to batteries made by LG Energy Solution as the main cause of the fires, LG Energy Solution counters that battery defects are unlikely to be the direct cause of the fires.

On the 25th, Hyundai announced that the recall of vehicles that caught fire, including the Kona EV, Ioniq EV, and Elec City electric buses, will cost approximately 1 trillion won.

The biggest issue surrounding the recall is the cost-sharing ratio. The 1 trillion won is a significant amount, equivalent to 36% of Hyundai Motor's operating profit last year and 2.5 times LG Energy Solution's operating profit. The two companies are currently negotiating cost-sharing but have significant differences in opinion.

Hyundai, based on the Ministry of Land, Infrastructure and Transport's opinion, views the cause of the fires as essentially related to LG Energy Solution's batteries. The Ministry explained that some high-voltage batteries initially produced at LG Energy Solution's Nanjing factory in China showed the possibility of fires caused by internal short circuits due to cell manufacturing defects (folded anode tabs).

Additionally, a detailed disassembly investigation of the defective high-voltage batteries collected through the recall confirmed the possibility of fires caused by internal cell misalignment (folded anode tabs). However, it was added that this was not directly confirmed in fire reproduction experiments.

This is why LG Energy Solution is actively refuting the responsibility claims. In a statement released the previous day, LG Energy Solution said, "As the Ministry of Land, Infrastructure and Transport announced, the internal cell misalignment did not cause fires in reproduction experiments, so it is difficult to consider it a direct cause." They also stated, "In the case of Hyundai's BMS charging map misapplication, it was confirmed that Hyundai incorrectly applied the fast-charging logic proposed by us to the BMS."

Due to the significant difference in views on the cause of the fires, it is difficult to finalize the cost-sharing ratio immediately. Accordingly, Hyundai said it may reflect the 1 trillion won in last year's fourth-quarter results for now and later recover some funds once the sharing ratio is determined. In the automotive industry, there are voices suggesting that LG Energy Solution, as the battery manufacturer, should bear up to about two-thirds of the cost.

This content was produced with the assistance of AI translation services.