GM and LG Settle to Establish $150 mn Fund for Chevrolet Bolt EV Owners

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General Motors (GM) and South Korea’s LG Energy Solution, along with LG Electronics, have reached a settlement to create a $150 million fund aimed at compensating Chevrolet Bolt EV owners affected by defective batteries.

The settlement resolves a class action lawsuit related to battery defects that prompted GM to recall Bolt EVs starting in 2020 due to numerous fire-related complaints. GM initially launched the Chevrolet Bolt EV in 2015, utilizing batteries supplied by LG entities as part of their business arrangement, Reuters news report said.

“GM, LG Energy Solution, and LG Electronics have agreed to a settlement with plaintiffs to resolve class action litigation related to the Bolt EV battery recall,” GM said in an emailed statement to Reuters. The statement added that Bolt owners who received a battery replacement or installed the latest advanced diagnostic software might qualify for compensation.

According to documents filed with the Michigan Eastern District Court, Bolt EV owners who had the final software remedy installed at a GM-authorized dealership by December 31, 2023, may be eligible for up to $1,400. Those who sold or terminated the lease of their vehicle before the software remedy was available, as well as those who already received a battery replacement, will receive a minimum payment of $700.

GM halted production of the Bolt EV last year to focus on new electric vehicle models. In 2021, the company announced a billion-dollar recall campaign to address battery fire risks, which led to a six-month pause in Bolt production and sales.

General Motors CEO Mary Barra said recently said it aims to double its electric vehicle production capacity and reach profitability in its EV business by mid-year after experiencing a slowdown in demand last year.

The company reported a 36 percent quarter on quarter increase in total US Ultium EV battery deliveries during the earnings call.

GM battery production plants in Ohio and Tennessee ramping up have allowed EV production costs to decrease, Paul Jacobsen, GM’s Chief Financial Officer said, citing a $12,000 production cost savings year over year for the Cadillac Lyriq. The newer Tennessee plant is expected to reach full installed capacity by the end of the year.

Increased battery production allows GM to remain on track to achieve 200,000-300,000-unit production and wholesale volume target in 2024 and allow for profitability in the EV portfolio in the second half of the year. This goal is a decrease from a previously stated goal to hit 400,000 units produced this year.

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