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"LG is a valued and respected supplier to GM, and we are pleased to reach this agreement," GM vice president of global purchasing and supply chain Shilpan Amin said in a statement. "Our engineering and manufacturing teams continue to collaborate to accelerate production of new battery modules and we expect to begin repairing customer vehicles this month."
Recalling and repairing the vehicles is expected to cost $2 billion, according to GM. This equates to roughly $14,000 per vehicle, making this one of the most expensive recalls ever, by-vehicle. This is largely due to the expense of replacing the Bolts' lithium batteries.
Rather than serving as reimbursement, the $1.9 billion LG settlement is instead simply meant to offset the costs. Previously, GM said that the recall effort would cost $1.8 billion, and $1.2 billion before that. The car company also originally said it would be pursuing reimbursement.
South Korea-based LG has been pivotal to GM's efforts to produce electric vehicles. Currently, LG and GM are partnering up to build two new battery factories in the U.S., with one of the factories costing $2.3 billion alone. However, the recent recalls may be slowing that process.
According to GM, 13 vehicles have spontaneously caught fire due to the faulty LG batteries. GM says the "rare manufacturing defects" that led to these fires were in fact two separate flaws that increased the risk of fire when present in the same vehicle. While the faulty batteries are being replaced, other projects are falling behind schedule.
Unrelated delays on the production of the Chevrolet Equinox at Ramos Assembly are also cropping up thanks to the shortage of semiconductors. Factory downtime will continue at least through November 15. Production of the Equinox has been paused since August 16.
GM has been pumping money into all-electric and autonomous vehicles, hoping to manufacture the next generation of electric cars. However, the recall has damaged the company's image, hurting Bolt sales. In fact, the issue is bad enough that GM has reportedly offered to buy back vehicles from customers warned against parking their Bolt vehicles near their house or garage due to the risk of fire.