SEOUL: South Korean battery firms LG Chem Ltd and LG Electronics Inc will be shouldering a combined US$1.2 billion for General Motors Co's Bolt electric vehicle recall - the lion's share of the expected costs.
GM in August expanded the recall, which will replace LG battery modules due to fire risk, to more than 140,000 cars, estimating the cost at US$1.8 billion.
The LG firms said today that talks over the costs had ended. They booked most of their 1.4 trillion won in costs in the July-September quarter although some was booked in the previous quarter.
For the latest quarter, LG Chem, whose wholly owned battery unit LG Energy Solution supplies batteries to GM, will take a charge of 620 billion won while LG Electronics, which assembles the cells into battery modules and packs, will book 480 billion won in costs.
Shares of LG Chem and LG Electronics closed up 4.2% and 3.3% respectively with investors relieved that the uncertainty over the recall costs has gone.
LG Energy Solution added that it plans to resume working on its initial public offering which had been suspended in August due to the lack of clarity over the recall costs.
