GM may be replacing tens of thousands of Bolt EV batteries, but it won't have to pick up the tab for most of them. The automaker has reached a deal that will have LG pay nearly all the costs associated with recalling the Chevy Bolt EV and EUV, with GM estimating that LG will "offset" $1.9 billion of the $2 billion in expenses. GM will recognize that financial recovery in its third-quarter earnings.
The brand said it was happy to land an agreement with a "valued and respected supplier." With that said, there's little doubt GM is using the deal to redirect blame — it stressed that the recall was prompted by "manufacturing defects" in LG batteries. LG spotted anode and cathode-anode separator issues that, combined, could increase the chance of battery fires.
LG has since addressed the battery issues and restarted production. The immediate costs of the recall may be secondary, however. Both companies have taken a hit to their relatively fragile reputations in the electric vehicle space — it doesn't look good for GM in particular when its two main EVs have to be taken off the road, if only briefly. GM's Hummer EV and electric pickups could mend that image, but that won't help much in the short term.