Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

GM digs in with LG Corp to speed a fix for Bolt battery fires

Stock MarketsSep 13, 2021 10:52AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: General Motors assembly workers connect a battery pack underneath a partially assembled 2018 Chevrolet Bolt EV vehicle on the assembly line at Orion Assembly in Lake Orion, Michigan, U.S., March 19, 2018. REUTERS/Rebecca Cook/File Photo 2/2

By Paul Lienert and Heekyong Yang

(Reuters) - General Motors Co (NYSE:GM) is taking a more direct role with South Korea's LG Corp, its longtime electric vehicle partner, in tracking down and fixing problems linked to battery fires in Chevrolet Bolts that threaten the strategic plans of both companies.

At an investor conference on Friday, GM Chief Financial Officer Paul Jacobson said LG is working with GM engineers to "clean up the manufacturing process" at LG battery plants and implement some "GM quality metrics."

Battery plants in South Korea and Michigan operated by LG Energy Solution (LGES) have been identified by GM as the source of defects behind a rash of battery-related fires in the Bolt that have triggered three recalls and $1.8 billion in warranty set-asides by GM since last November - recalls for which GM still has not implemented a hardware fix.

LGES and sister company LG Electronics on Friday reiterated their "close relationship" with GM and said the three companies are "actively cooperating to come up with a final recall plan" to "wisely resolve" battery issues in more than 140,000 Bolts - the entire production run since late 2016.

“Experts from GM and LG continue to work around the clock on the issues," GM spokesman Dan Flores said on Thursday. "We are determined to do the right thing for our customers and resolve the problem once and for all. Once we are confident LG can provide us with good battery modules, we will begin repairs as quickly as we can.”

GM has said early Bolt models will have their entire battery pack replaced, while newer models will have only defective modules within the pack replaced. Those new parts may not be available until after November.

In the meantime, Bolt owners and prospective EV buyers have unleashed a torrent of complaints and concerns on social media aimed at both GM and LG. It is unclear how much permanent damage either company may sustain from the battery fires.

"Not even Tesla (NASDAQ:TSLA) has been slowed by fires," said Tyson Jominy, JD (NASDAQ:JD) Power vice president of automotive data & analytics. "I don’t expect this to slow down the EV transition much."

With resolution of the costly recall debacle still up in the air, relations between GM and LG have soured, people familiar with the situation said. The partners are stuck in what one Korean analyst deemed a "show window marriage," one in which a divorce is unlikely as few immediate alternatives are available.

For now, GM's Michigan factory that assembles the Bolt is shut down and its 1,000 workers idled until late September.

The automaker said it has bought back some Bolts from owners and is reviewing such requests on a case-by-case basis. GM also has said it expects LG to help shoulder the $1.8 billion expense to replace Bolt battery packs.

On Friday, GM's Jacobson said the two companies are having "high level conversations" about costs, and that GM expects reimbursement.

But the ultimate cost to GM and LG could be even greater. GM is ramping up a $35 billion campaign to launch a new generation of electric and automated vehicles powered by its proprietary Ultium battery technology.

The Ultium batteries GM plans to use in key electric models such as the GMC Hummer EV and electric Chevrolet Silverado are scheduled to be made with LGES in joint-venture factories in Ohio and Tennessee as part of a $4.6-billion investment program.

But following the latest Bolt recall in late August, Chief Executive Mary Barra left open the possibility that GM could find new partners for future battery plants.

GM's Ultium cells have a different design, size and chemistry than the LG cells in the Bolt and are packaged into modules and packs in a different way.

GM executives also stress that the automaker, not LG, will control manufacturing and quality control for Ultium batteries.

LG and its affiliates have as much at stake as GM, if not more.

The Bolt recalls are not the only ones involving LG batteries. South Korea's Hyundai Motor Co earlier this year recalled nearly 76,000 Kona Electric cars worldwide to replace defective battery modules after reports of fires linked to LG batteries made in China.

LG's signature battery technology, a thin and flexible rectangular format called pouch cells, is one of three different battery types used in electric vehicles.

Tesla Chief Executive Elon Musk took a jab at the GM-LG pouch cell technology in a recent tweet, writing that "probability of thermal runaway is dangerously high with large pouch cells. Tesla strongly recommends against their use." Tesla mainly uses cylindrical cells from several sources, including some made in China by LG.

It is not clear what type of cells LGES expects to produce as part of its plan to invest another $4.5 billion in two additional U.S. battery plants. Switching battery cell technology and formats could slow the investment timetable.

On Friday, LGES told Reuters: "We will continue to win orders and proceed (with) our investment in global markets, including the United States, as planned."

GM digs in with LG Corp to speed a fix for Bolt battery fires
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Kaveh Sun
Kaveh Sun Sep 13, 2021 11:03AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gm design is cr#. Back in the 90s their ev caught fired. They pulled out the old battery design and blame LG so they Go ahead and use Chinese batteries
Barak David
Barak David Sep 13, 2021 5:32AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
so much text, and nothing is new.. all talk and they keep on doing the same.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email