GM "Offset Up to $1.9 Billion in Bolt Battery Replacement Costs Through Agreement with LG" (Update)

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] General Motors (GM) announced on the 12th (local time) that it has reached an agreement with LG Chem regarding the cost burden of replacing the batteries of the electric vehicle Bolt, which has experienced consecutive fires.

GM explained that the estimated cost of replacing the Bolt's batteries is $2 billion, and that this agreement will reduce their losses by $1.9 billion.

GM initially expected the cost of replacing the Bolt batteries to be $1.8 billion but has since revised this estimate upward.

According to GM's announcement, LG Chem will bear most of the battery replacement costs. CNBC reported that LG is expected to bear up to $1.9 billion in costs, and that GM has won the compensation negotiations.

Silfun Aimin, GM's Vice President of Global Purchasing and Supply Chain, said, "We are pleased to have reached an agreement with our trusted partner LG. We expect to accelerate the production of new battery modules and begin repairing customers' vehicles starting this month."

GM has pointed out that the batteries used in the Bolt vehicles that caught fire were manufactured at LG's plants in Korea and Michigan. GM has previously warned of a full battery replacement, claiming that a rare manufacturing defect increases the risk of fire.

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