The Orion Assembly plant in Michigan will not resume the production of the Chevrolet Bolt EV and Chevrolet Bolt EUV at least not until October 29, which is about two additional weeks on top of the previously extended idle period (from August 23 to mid-October).
According to Automotive News, the reason is the lack of battery modules after a massive recall that concerns manufacturing defects (a torn anode tab and folded separator) in about 142,000 Bolt EV/EUV.
In September, General Motors announced that LG Energy Solution's plants in Holland and Hazel Park, Michigan resumed production of battery cells and battery modules with an updated manufacturing processes.
Hopefully, soon new modules will be available for existing cars as well as for production of new cars. Automotive News reports that the first replacement modules were sent to some Chevrolet dealers in October and that the replacement takes about two days.
Good news for GM is that the company has reached an agreement with LG on Bolt battery recall costs. The South Korean supplier is expected to covere $1.9 billion out of $2.0 billion total.
"General Motors Co. (NYSE: GM) announced today it has reached an agreement under which LG Electronics Inc. will reimburse GM for costs and expenses associated with the recall of Chevrolet Bolt EVs and EUVs due to manufacturing defects in battery modules supplied by LG.
As a result of the agreement, GM will recognize an estimated recovery in its third-quarter earnings that will offset $1.9 billion of $2.0 billion in charges associated with the recalls."
According to Bloomberg, GM will recoup nearly all of the costs of the recall, while the LG Corp. companies already assigned the costs (1.4 billion won / $1.2 billion) between companies:
- LG Chem's LG Energy Solution (battery cells) - 620 billion won ($520 million)
- LG Electronics (battery modules) - 480 billion won ($400 million)
- costs assigned in the Q2 2021 - about 300 billion won ($250 million)
The total is about $1.2 billion, which means that we don't yet know everything about the cost distribution.
Now, LG Chem's LG Energy Solution can continue its preparations for an upcoming IPO.
Chevrolet Bolt EV/EUV battery recall in brief
- the full battery recall was announced on August 20, 2021
- cause: manufacturing defects (a torn anode tab and folded separator) in lithium-ion battery cells (pouch type) supplied by LG Chem's LG Energy Solution may lead to a battery fire "in rare circumstances"
Cells were produced in plants in South Korea and in Michigan
- fire reports (as of September 16, 2021 via Reuters): 12 and three injuries
- cars: about 142,000 cars (including about 100,000 in the U.S.)
all Chevrolet Bolt EV (2017-2022)
all Chevrolet Bolt EUV (2022)
- remedy: replacement of battery modules (newer cars) or entire battery packs (early cars) will start in October 2021
The new batteries will include an extended battery 8-year/100,000-mile limited warranty (or 8-year/160,000 km limited warranty in Canada), whichever comes first.
temporarily: don't charge beyond 90% State of Charge (SOC) or discharge below approximately 70 miles (113 km) of the remaining range (which is close to 30% SOC, assuming roughly 250 miles of EPA range) and keep the vehicles outside.
- estimated cost: $2.0 billion
on average it might be about $12,675 per car (or about $190 per kWh) assuming $1.8 billion
In October GM announced an agreement with LG on Bolt EV recall costs - "GM will recognize an estimated recovery in its third-quarter earnings that will offset $1.9 billion of $2.0 billion in charges associated with the recalls."
- estimated battery volume: 9.2-9.4 GWh
- similar case: Hyundai recall of about 82,000 EVs (including 75,680 Hyundai Kona Electric)
- production: production of new cars was halted in August 2021 and it's expected to resume no earlier than in late-October