The recall affects previously recalled Chevrolet Bolts produced between 2017 and 2019 over battery defects that may cause fires, the company said. The issue affects 50,932 Bolts, according to the National Highway Traffic Safety Administration, or NHTSA.
Earlier this month, General Motors (ticker: GM) advised owners of the affected Bolts to avoid parking their vehicles inside or charging them unattended overnight. That warning followed a November recall for the vehicles after the NHTSA confirmed five instances of fires and two injuries. In the first recall, GM updated its software to look for and identify issues with batteries.
It appears the software update hasn’t fully addressed the risk of fire. A GM spokesperson told Barron’s that the software diagnostics update wasn’t effective at addressing the safety risk in all vehicles. The spokesperson also said there are now nine instances of battery-related fires among the recalled vehicles, with one occurring after the software update had been completed.
The financial implications for GM remain unclear. According to automotive research company Kelley Blue Book, the Chevrolet Bolt was one of the top five bestselling EVs in 2020, behind Tesla’s (TSLA) EV lineup. But the Bolt still constitutes a small portion of GM’s total sales.
Investors should remain wary of the potential costs associated with repairing or replacing EV batteries. Earlier this year, Hyundai recalled 76,000 Kona EVs, determining that the company would have to replace all of the batteries at a cost of $900 million. Hyundai’s battery supplier LG Energy Solutions, a subsidiary of LG Chem (051910.Korea), assumed 70% of the costs. As a result, Hyundai reduced its fourth-quarter operating profit by nearly 20%.
GM said LG Energy Solutions manufactured the cells and battery packs for the vehicles that are part of the Bolt recall. LG Chem didn’t return a request for comment.
GM stock closed down 1.3% at $54.94 on Friday on the recall news, while the S&P 500 finished up 1% and notched a new closing record. On Monday, shares of GM more than regained Friday’s losses.
Write to editors@barrons.com
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Jay Arant 2 minutes ago
Battery defects causing fires? Hmmm...sounds like Tesla's early days growing pains just got acquired by GM! Not so easy cranking out EVs as they have painfully discovered.....
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Gm used to make some great cars. Sadly, they now deserve to fade out of existence.
Those replaced batteries come in at $11,842 each.
To paraphrase Ralph Nader.....unsafe at any voltage.
I’d rather use a Flintstone car.
The battery looks very very complicated
I wouldn’t buy a GM anything right now. And I say this as the current owner of my trusty 98 K2500 Ext Cab. 250K miles so far.
I think getting rid of the Volt was the biggest mistake GM made. It may have needed some refinement, but it seemed to be an otherwise good E-car.
With battery developments, it would have gotten enough mileage that the average person didn’t have to fill up more than once a month and it would have become a 5 person vehicle in a few years.
The last GM product I owned was 1979 Chevy Caprice. It literally fell apart. Totally rough running, gas guzzling hunk of junk.
The storage battery electric automobile: been catching fire for 189 years.