General Motors Extends Production Shutdown of the Chevy Bolt EV Until Sept 24 Due to Battery Recall

General Motors Extends Production Shutdown of the Chevy Bolt EV Until Sept 24 Due to Battery Recall

Author: FutureCar Staff    

U.S. automaker General Motors is extending the shutdown in the factory where it produces the Chevy Bolt EV after the automaker recalled all of the vehicles due to the risk of battery fires. The plans were reported by Reuters.

GM hoped to quickly resume production of the fully-electric Bolt EV at its Orion Assembly plant in Michigan, but the automaker said it's now dealing with a "battery pack shortage" and will suspend production of the Bolt another two weeks until Sept 24.

However, GM said it will not resume Bolt production or sales until it is satisfied that the recall remedy will address the fire risk issue, which could take longer. In total, GM said it has confirmed nine total Bolt EV fires. 

In July, GM issued a second recall for roughly 69,000 Chevrolet Bolt EVs worldwide for fire risks after reports of two battery fires. In August, that recall was extended to include 140,000 vehicles.

The 2017-2019 model year Bolt EVs were first recalled in Nov. 2020 due to the potential of a fire in the vehicle's high-voltage battery pack. For the initial recall last year, GM dealers installed improved diagnostic software and limited the battery state of charge to just 90%. GM said the risk of fire is increased when the Bolt's battery is charged to full, or very close to full capacity.

However, a new fire was reported in Bolt EV that had already had the software update installed as part of the first recall. 

GM said it will replace defective battery modules as needed, which depending on how many battery modules will need to be replaced could be as high as $1 billion. The battery in the Bolt EVs is warrantied by GM for 8 years or 100,000 miles. 

GM expects LG Chem to pay for the recall since its supplied the defective batteries. The $1 billion cost to replace defective battery modules is on top of the $800 million GM said it will cost for the original Bolt recall in Nov 2020. 

In a press release on Aug 20th, the automaker said its "pursuing commitments from LG for reimbursement of this field action."

The battery pack is one of the most expensive components in electric vehicles. According to energy storage research firm Cairn ERA, General Motors pays an average of  $169 per kWh for its battery cells while the industry average runs at about $186 per kWh, CNBC reported. The Bolt is equipped with a 66 kWh battery pack.

Experts from GM and its battery partner LG Chem have identified the presence of two "rare" manufacturing defects in the battery cell used in the Bolt as the root cause of battery fires.

GM and LG engineers are still working to finalize all the steps of the recall repair process, including a potential dealer inspection process. GM said it will notify customers when replacement parts are ready. 

The high-voltage Bolt EV batteries in question were produced at LG Chem's South Korean manufacturing facility. 

Shares of LG Chem fell by 11% on Aug 23, which was the first day of trading after GM announced the expanded recall of the Bolt EV. The company's falling stock price erased $6 billion in market value in a single day and has not rebounded yet. LG Chem's stock is down 12.2% on Thursday trading at 748,000 KRW ($639.26).

GM's stock is trading down 1% to 48.42 on Thursday, roughly the same it did when its announced the recall last month. However, GM shares have fallen 10.7% since Aug 12.

GM is in the midst of its transition to EVs, beginning with models like the Bolt EV and EUV. However the recall of the Bolt EV could impact consumer confidence in GM's upcoming EVs, like the Cadillac Lyriq and electric Chevy Silverado pickup. The recent recalls might even prompt consumers to purchase a new EV from GM's rivals instead, including Tesla, Ford Motor Co and Volkswagen. 

In addition to the recall of the Bolt EV, GM has also been dealing with chip shortages that forced it to idle plants in North America. The chips are a key component for vehicle production and without them important many vehicles cannot be fully assembled.

As a result of the chip shortages, GM announced on Sept 3 that it's suspending production at 8 of its 15 factories in North America. The work stoppages are expected to last one to two weeks and began on Monday.

FutureCar Staff
FutureCar Staff
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