General Motors (GM) Co said it would take a hit of $1 billion to expand the recall of its Chevrolet Bolt electric vehicles (EV) due to the risk of fires from the high-voltage battery pack - a blow for the largest US automaker as it seeks to ramp up EV sales.

The Detroit company also said it would indefinitely halt sales of the EVs due to the issue and will seek reimbursement from battery supplier LG. The latest recall covers 73,000 vehicles from model years 2019 through 2022.

“The reserves and ratio of cost to the recall will be decided depending on the result of the joint investigation looking into the root cause, currently being held by GM, LG Electronics and LG Energy Solution,” LG said in a statement, referring to its subsidiaries.

LG added that it is actively working with its client and partners to ensure that the recall measures are carried out smoothly.

GM shares were down 2.2 per cent in after-hours trade after dipping 0.6 per cent during Friday’s regular session.

Earlier this month, South Korea’s LG Electronics Inc cut its second-quarter operating profit by more than a fifth to reflect costs for the GM recalls.

LG Electronics has supplied GM with battery modules made with cells produced by LG Chem’s wholly owned battery subsidiary LG Energy Solution (LGES).

Earlier this year, Hyundai Motor Co said it would spend $900 million to replace LG batteries in some 82,000 EVs due to fire risks.


Picture used for illustrative purpose only.

On Friday, GM said the recall covers all remaining Bolt vehicles not previously recalled in July. GM said it will replace defective battery modules in Bolt EVs and EUVs with new modules. The $1 billion price tag for the latest recall comes on top of $800 million GM said previous Bolt recalls had cost.

GM and LGES have a joint venture, Ultium Cells LLC, that is building battery cell plants in Ohio and Tennessee, with plans to add two more after that. GM has said it will use a different-generation battery when it launches electric Hummer and Cadillac vehicles over the next year.

In July, GM issued a recall for nearly 69,000 Chevrolet Bolts for fire risks after reports of two fires and said it would replace defective battery modules as needed. Friday’s action expands the population of vehicles for the same issue. GM, which said Bolt sales would cease until it was satisfied with the fix, said it is “working aggressively with LG to increase (battery module) production as soon as possible.” GM added it will notify customers when replacement parts are ready.

Some Bolt EVs recalled in July were previously recalled last November to update software to address fire risks, but at least one fire occurred after the software update. GM said on Friday there had been a total of 10 Bolt fires.