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LG Energy Solution will cover 70% of the cost of recalling Hyundai electric vehicles with defective batteries
In February, Hyundai Motor was slated to announce the largest EV recall ever, which will replace its traction batteries. Almost $ 890 million of expenses for this event will be divided between Hyundai and the battery manufacturer LG Energy Solution, and the latter will bear 70% of the costs.
Image source: Reuters
As a reminder, initially, the battery supplier did not want to admit his guilt, citing defects in the fast charging system used by Hyundai. The amount at stake was not small, so both Korean companies were already ready to get involved in protracted litigation, but Hyundai Motor’s serious ambitions in the electric vehicle segment pushed the manufacturer to quickly reach an amicable agreement.
As the Nikkei Asian Review explains, LG Energy Solution now agrees to bear 70% of the cost of recalling Hyundai electric vehicles and replacement of traction batteries, while the automaker itself will cover the remaining 30%. Batteries to be fully replaced in 81,700 EVs sold in the US, South Korea and Europe. In the cost of the car, the share of the traction battery reaches 30%, so the revocable campaign will cost Korean companies a pretty penny.
In January of this year, according to SNE Research, Korean traction battery manufacturers collectively controlled no more than 27.2% of the market, while the trio of Chinese manufacturers, CATL, BYD and CALB, took 44.2% of the global market. The leading CATL in this segment alone controlled 31.2% of the segment. A year ago, the leadership belonged to LG Energy Solution, which was then under the LG Chem brand.