By Paul Lienert and Heekyong Yang
(Reuters) – Shares of Korean battery maker LG Chem slid to a 9-thirty day period very low on Friday as traders digested stories linking fires in Common Motors Co and Hyundai Motor Co cars to LG batteries from at the very least two Asia vegetation.
Paperwork submitted by GM and Hyundai with the U.S. safety regulator demonstrate how the two automakers individually recognized the similar lead to of battery fires in their latest electric automobiles, tracing them to very similar manufacturing problems in battery cells made at at the very least two vegetation operated by a device of LG Chem.
“Collectively with our customer and partners, LG is actively functioning to make certain that the recall steps are carried out efficiently,” an LG spokesperson reported on Friday. “The reserves and ratio of price tag to the recall will be decided relying on the final result of the joint investigation wanting into the root lead to, presently remaining held by GM, LG Electronics and LG Electricity Answer.”
GM and Hyundai connected the fires to lithium-ion battery cells equipped by LG Vitality Option, an LG Chem subsidiary and one of the world’s premier battery makers. The cells were being produced at LG crops in South Korea and China.
In Korea, the decrease in LG Chem shares reflected investors’ concerns about the multibillion-dollar expense of recalling the defective batteries and how that could possibly influence the company’s interactions with GM, Hyundai and other individuals.
LG presents comparable EV battery cells to many car makers, such as Ford Motor Co and Volkswagen AG. Ford and VW have not claimed similar troubles with the LG cells.
GM final 7 days instructed the Nationwide Freeway Visitors Protection Administration that industry experts from LG and GM on July 21 determined “two rare producing flaws in the same battery cell” as the root bring about of the battery fires in the Chevrolet Bolt EV.
GM recognized the flaws as a torn anode tab and a folded separator, and stated the faulty cells were generated at LG’s plant in Ochang, Korea.
Following the tenth Bolt fire, in Chandler, Arizona, GM claimed it had uncovered producing defects in some cells “produced at LG manufacturing facilities further than the Ochang plant.”
GM last week widened its recall of the Bolt to more than 140,000 autos to replace battery packs, at a price tag now approximated at $1.8 billion. The automaker stated it would find reimbursement from LG – GM’s husband or wife in the Ultium LLC battery joint undertaking in the United States.
In a assertion on Friday, LG said its share of the recall price tag “will be decided dependent on the outcome of the joint investigation searching into the root induce.”
Hyundai said its investigators established that a battery hearth in a Kona EV – one particular of additional than 15 these incidents in Korea, Europe and Canada – was brought on by an interior limited circuit in a battery mobile. Hyundai traced the issue to a “folded anode tab.”
South Korea’s transport ministry reported in February that it would recall Kona EVs with battery cells created at LG’s China factory.
Hyundai mentioned it would shell out approximately $900 million to swap LG batteries in some 82,000 EVs around the globe, like much more than 75,000 Kona EVs.
(Reporting by Paul Lienert in Detroit and Heekyong Yang in Seoul Enhancing by Matthew Lewis)
