# GM digs in with LG Corp to speed a fix for Bolt battery fires
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-09-13
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: GM & LG Alliance to Address Chevy Bolt Battery Fires
Meta Description: GM and LG are working closely to address battery fire problems in Chevrolet Bolts, implementing solutions to maintain quality and safety.
URL: https://financedigest.com/gm-digs-in-with-lg-corp-to-speed-a-fix-for-bolt-battery-fireshtml

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By Paul Lienert and Heekyong Yang

(Reuters) – General Motors Co 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](https://www.financedigest.com/south-korea-has-not-supplied-lethal-weapons-to-ukraine-president-says.html "South Korea has not supplied lethal weapons to Ukraine, president says") 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](https://www.financedigest.com/apple-says-issues-with-imessage-facetime-resolved35792.html "Apple says issues with iMessage, FaceTime resolved") 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](https://www.financedigest.com/4-things-to-do-if-you-run-into-problems-with-your-leased-car.html "4 Things to Do if You Run Into Problems With Your Leased Car") 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](https://www.financedigest.com/global-market-study-on-battery-pack-for-marine-hybrid-full-electric-propulsion.html "Global Market Study on Battery Pack for Marine Hybrid & Full Electric Propulsion") 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](https://www.financedigest.com/ladbrokes-owner-entain-buys-sports-media-business-365scores.html "Ladbrokes owner Entain buys sports media business 365scores") aimed at both GM and LG. It is unclear how much permanent [damage either company](https://www.financedigest.com/financial-services-companies-risk-damaging-fines-by-ignoring-gdpr-says-survey.html "Financial Services Companies Risk Damaging Fines By Ignoring GDPR, Says Survey") may sustain from the battery fires.

Not even Tesla has been slowed by fires,” said Tyson Jominy, JD Power vice president of automotive [data & analytics](https://www.financedigest.com/top-5-data-analytics-trends-for-2023.html "Top 5 Data Analytics Trends for 2023"). I don’t [expect this to slow](https://www.financedigest.com/dollar-set-for-weekly-loss-amid-expectations-fed-will-slow-hikes.html "Dollar set for weekly loss amid expectations Fed will slow hikes") down the EV transition much.

With [resolution of the costly](https://www.financedigest.com/ccp-recovery-and-resolution-the-good-the-bad-and-the-costly.html "CCP Recovery and Resolution: The good the bad and 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](https://www.financedigest.com/volkswagens-mexico-factory-workers-reject-union-pay-deal.html "Volkswagen’s Mexico factory workers reject union pay deal") 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](https://www.financedigest.com/hyundai-breaks-ground-on-5-5-billion-u-s-ev-battery-plant.html "Hyundai breaks ground on .5 billion U.S. EV, battery plant") packs.

On Friday, GM’s Jacobson said the two [companies are having “high level conversations” about costs](https://www.financedigest.com/companies-cost-inflation-is-slowing-but-shoppers-may-wait-for-lower-prices.html "Companies’ cost inflation is slowing but shoppers may wait for lower prices"), 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](https://www.financedigest.com/abb-to-launch-1-billion-share-buyback-on-april-3.html "ABB to launch billion share buyback on April 3") 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](https://www.financedigest.com/nissan-renault-to-invest-600-million-to-make-6-new-models-in-india.html "Nissan, Renault to invest 0 million to make 6 new models in India") 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](https://www.financedigest.com/volkswagen-to-partner-on-indonesia-ev-battery-ecosystem-minister.html "Volkswagen to partner on Indonesia EV battery ecosystem -minister") 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](https://www.financedigest.com/the-cell-culture-media-market-to-get-way-ahead-with-digitization.html "The Cell Culture Media Market to get way ahead with digitization").

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](https://www.financedigest.com/home-battery-sales-in-germany-may-surge-59-this-year-study.html "Home battery sales in Germany may surge 59% this year -study") 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](https://www.financedigest.com/battery-swapping-spurs-kenyas-electric-motorbike-drive.html "Battery swapping spurs Kenya’s electric motorbike drive") vehicles.

Tesla Chief Executive [Elon Musk](https://www.financedigest.com/elon-musk-and-others-urge-ai-pause-citing-risks-to-society.html "Elon Musk and others urge AI pause, citing ‘risks to society’") 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](https://www.financedigest.com/ikea-plans-new-u-s-stores-in-2-2-billion-push-to-challenge-walmart-and-wayfair.html "IKEA plans new U.S. stores in .2 billion push to challenge Walmart and Wayfair") in two additional U.S. battery plants. Switching [battery cell technology and formats could slow the investment](https://www.financedigest.com/volkswagen-to-invest-in-mines-in-bid-to-become-global-battery-supplier.html "Volkswagen to invest in mines in bid to become global battery supplier") timetable.

On Friday, LGES told Reuters: “We will continue to [win orders](https://www.financedigest.com/rheinmetall-wins-quarter-billion-euro-order-for-e-vehicle-parts.html "Rheinmetall wins quarter-billion euro order for e-vehicle parts") and proceed (with) our investment in global markets, including the United States, as planned.

(Reporting by Paul Lienert in Detroit and Heekyong Yang in Seoul; Additional reporting by David Shepardson in Washington; Writing by Joseph White and Paul Lienert; Editing by Dan Grebler)


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