LG Electronics and LG Energy Solution Set 325.6 Billion KRW Provision for 'GM Bolt Fire Recall'

"Some Changes Possible Depending on Future Recall Progress"

[Asia Economy Reporter Kim Ji-hee] LG Electronics and LG Energy Solution have set the recall provision for General Motors (GM)'s electric vehicle Chevrolet Bolt EV at 325.6 billion KRW. However, the two companies added that since they are jointly investigating the cause of the fire with GM, the cost-sharing of the recall may change depending on the results.

LG Electronics and LG Energy Solution's parent company, LG Chem, announced on the 10th through the Financial Supervisory Service's electronic disclosure system that they will revise their earnings by reflecting the provision in the operating profit for the second quarter. Of the total provision, LG Electronics will bear 234.6 billion KRW, and LG Energy Solution will bear 91 billion KRW.

Accordingly, LG Electronics' second-quarter operating profit was revised from the previous 1.1127 trillion KRW to 878.1 billion KRW. LG Chem's operating profit changed from 2.2308 trillion KRW to 2.1398 trillion KRW. LG Electronics explained, "The expected costs due to changes in financial statements from reflecting the provision were accounted for in the second quarter," adding, "There is a possibility of some changes depending on the progress of the recall going forward."

LG Energy Solution also stated, "We are currently analyzing the cause of the recall with the customer and module manufacturers," indicating that the size of the provision may change.

Earlier, GM decided to re-implement a recall for some vehicles produced between 2017 and 2019 in relation to recent fire incidents involving the Bolt EV electric vehicle. GM had already conducted a recall in November last year for 2017-2019 Bolt EV models and fixed defects through a software update. However, after another fire occurred in a Bolt EV in Vermont, USA, which had completed the software update, GM decided on an additional recall. The affected vehicles used battery cells produced by LG Energy Solution, which LG Electronics modularized and supplied to GM. It was confirmed that problems occurred during the production process of some battery modules.

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