Hyundai Motor, LG Energy Agrees To Split EV Battery Recall
The Hyundai Motor Co. and LG Energy Solution Ltd. announced their cost-sharing ratio for replacing LG-made batteries in three Hyundai EV models.
According to officials, LG Energy Solution Co. will shoulder about 70 percent and Hyundai Motor Co. the rest 30 percent for around $833 billion global recall.
The cost-sharing agreement suggests that the leading cause of the Kona EV fires was defective batteries from LG Energy Solution.
An interim investigation by the state-run Korea Automobile Testing & Research Institute (KATRI) cited a poor alignment (cathode tab folding) inside the battery cells as a probable cause of the fires.
The two giant companies did not lay down the full amount, but corresponding amounts have been reflected in the two companies' fourth-quarter bottom line as provisions. Simultaneously, the total recompense cost is estimated at over 1 trillion won ($889 million), Yonhap News Agency report.
"We have managed to reach a satisfactory agreement on the ratio of cost-sharing, regarding the battery recall," a Hyundai Motor official said.
"Both companies will now exert all efforts on swiftly executing the relevant actions in the market," Hyundai added.
Hyundai Motor said last month that it would replace Kona EV units, Ioniq EV, and Elec City buses with around 82,000 batteries sold globally due to their possible fire risks.
The complex battery system was provided from November 2017 to March 2020 by LG Energy, an LG Chem affiliate.
After the South Korean automaker unveiled its Ioniq 5, the battery replacement proclamation arose in a while after the first model that takes on an EV-only electric-global modular platform amidst an intense EV market.
The latest EV model is scheduled to be released in the European market in the coming month and the domestic market in the second quarter of the year, eager to reach its global sales goal of 70,000 units this year.
