GM recalls all Chevy Bolts for fire risk at cost of an extra $1 billion

— General Motors on Friday issued a new recall that expands to all Chevrolet Bolt EVs and the new EUV for fire risk and will provide customers with an eight-year warranty or 100,000 miles on new battery modules for the affected cars.

The automaker said it expects the recall to cost it an additional $1 billion and is seeking reimbursement for some of that cost from the battery supplier, LG Chem.

GM said that, in rare cases, batteries supplied to GM for the Bolts "may have two manufacturing defects — a torn anode tab and folded separator — present in the same battery cell, which increases the risk of fire." 

The high voltage batteries used in the Bolts are made by LG Chem’s Ochang, South Korea, facility though GM discovered manufacturing defects in certain battery cells produced at LG manufacturing facilities beyond the Ochang, Korea, plant, GM said.

GM's upcoming EVs will use the automaker's proprietary Ultium battery system. 

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The $1 billion fix

Last month, GM recalled 68,600 of the model year 2017-19 all-electric Bolt hatchbacks for the second time in less than a year because of a potential fire risk. 

The company made the move after two Bolts caught fire without impact in recent months. GM is confirming that at least one of the Bolt fires was battery-related and happened despite the owner getting the fix from GM's first recall on the cars last November.

GM is expanding that second recall to include an additional 9,335 of the 2019 model year Bolts as well as 63,683 of the 2020-22 model year Bolt EVs and the new EUVs. Most of those are in the United States. 

GM said in a statement: "Out of an abundance of caution, GM will replace defective battery modules in Chevrolet Bolt EVs and EUVs with new modules, with an expected additional cost of approximately $1 billion."

In the second-quarter earnings report, GM said the Bolt recall has already cost $800 million. That cost made up the bulk of GM’s $1.3 billion in warranty expenses in the quarter. 

"The total recall costs for the Bolt across both actions this year is about $1.8 billion, which is a large number and I can understand why GM is seeking some reimbursement from the supplier," said Morningstar auto analyst David Whiston. "I don’t know if they’ll get it or not. It’s not drastically less than what would be GM’s now suspended annual dividend payout of a bit over $2 billion."

This recall is significant, but it is hardly GM's biggest recall. In 2014, GM recalled more than 2.7 million cars due to faulty ignition switches that could cause the engines to stall in small GM vehicles such as the Chevrolet Cobalt and Saturn Ion. Altogether, that scandal left at least 124 people dead and 275 injured. That cost the company more than $5.3 billion in the end. 

2020 Chevy Bolt fire

After the ignition switch recall, GM has to show they are doing the right thing, "and then some with safety," Whiston said.

"So even though $1 billion is a lot, if it needs to be done to ensure peace of mind and protect GM from another congressional hearing, then it’s the right thing to do," Whiston said.

Whiston said that's especially true as GM looks to introduce 30 new electric vehicles by 2025 and needs to protect its battery-electric reputation.

An EV fire hazard is not unique to GM, said Christopher Tang, business professor at University of California, Los Angeles. "Tesla has a similar issue, therefore, it would be a positive if the EV industry can work together to find a safer solution for EV owners."

Tang said because fire risk is not a unique problem to GM, any negative market reaction to GM's recall should be mild. 

“Our focus on safety and doing the right thing for our customers guides every decision we make at GM,” said Doug Parks, GM executive vice president of Global Product Development, Purchasing and Supply Chain. “As leaders in the transition to an all-electric future, we know that building and maintaining trust is critical. GM customers can be confident in our commitment to taking the steps to ensure the safety of these vehicles.” 

The recall comes days after online Chevrolet Bolt social media pages lit up with reports of a 2020 Bolt catching on fire in California. 

GM spokesman Dan Flores said, "We have reached out to the customer, but we haven’t inspected that vehicle. So we can’t confirm that issue. Certainly, that vehicle is very concerning."

GM said it launched this expanded recall after further investigation into the manufacturing processes at LG Chem and after it disassembled battery packs, which revealed manufacturing defects in certain battery cells made at LG factories beyond the Ochang, Korea, plant, GM said.

"GM and LG are working to rectify the cause of these defects," the company said in a statement. "In the meantime, GM is pursuing commitments from LG for reimbursement of this field action."

Long warranty

GM said the batteries with these new modules will come with an eight-year/100,000-mile limited warranty (or eight-year/160,000 km limited warranty in Canada).

The automaker said it is "working aggressively" with LG to increase production as soon as possible. GM will notify customers when replacement parts are ready. 

In November, GM issued the first recall on the 2017-19 model year Bolts because the vehicles potentially posed a fire risk then.

GM said it found five vehicles in which the batteries caught fire without any impact, injuring two people with smoke inhalation.

Until customers in the new recall population receive replacement modules, they should:

• Set their car at a 90% state of charge limitation using Target Charge Level mode or have their dealer do it.
• Charge their vehicle more frequently and avoid depleting their battery below 70 miles of remaining range.  
• Park their vehicles outside immediately after charging and do not leave their vehicles charging indoors overnight.

Any Bolt owners with additional questions or concerns should go to www.chevy.com/boltevrecall. They can also call the Chevrolet EV Concierge 833-EVCHEVY, which is available 8 a.m.-12 a.m. Monday-Friday; noon-9 p.m. Saturday and Sunday. Or call their dealer.

Contact Jamie L. LaReau: 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.