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EV recalls

Hyundai to recall some 82,000 EVs over fire risk; cost seen at $900 mn

By Feb 24, 2021 (Gmt+09:00)

2 Min read

Hyundai Motor's Kona electric SUV 
Hyundai Motor's Kona electric SUV 

Hyundai Motor Co. said on Wednesday that it will recall 81,701 units of its electric vehicles sold worldwide over fire risk, in a move that could cost the top South Korean automaker up to 1 trillion won ($900 million).

The models subject to the recall are 75,680 units of the Kona subcompact SUV, 5,716 Ioniq EVs and 305 Elec City buses manufactured between November 2017 and March 2020, according to the company and Korea’s Ministry of Land, Infrastructure and Transport.

Hyundai Motor said the EVs, to be recalled from Mar. 29, will have their battery cells replaced.

The automaker estimates the cost of the battery replacements at about 1 trillion.

The battery system subject to the replacement was manufactured by Korea’s No. 1 EV battery maker, LG Energy Solution Ltd., a spin-off from LG Chem Ltd.

Hyundai Motor said it plans to split the cost with the battery supplier and reflect its share of the replacement cost in its results for the fourth quarter of 2020.

Industry officials said determining how to share the cost between Hyundai and LG is likely to be tricky, as each company blames the other for the problems.

FIRES AFTER SOFTWARE UPGRADE

Following the recall announcement, Hyundai Motor’s shares fell 3.9% to close at 235,000 won on Wednesday. Hyundai’s affiliate Kia Corp. finished down 4.7% at 75,000 won. LG Chem ended 2.8% lower at 860,000 won. LG Energy is unlisted.

Hyundai's latest move follows a recall in October of 2020 that saw more than 70,000 Kona SUVs globally taken in to receive software updates to address the possibly fire-prone battery cells. But some of the recalled vehicles caught fire even after the upgrade.

A Hyundai Motor Kona EV catches fire while charging its battery at a charging station.
A Hyundai Motor Kona EV catches fire while charging its battery at a charging station.

The transport ministry said on Wednesday that an initial probe showed that faulty high-voltage battery cells could pose a fire risk.

The ministry said it also found that Hyundai’s battery management system was not appropriately applied to the fast-charging system, hinting that it may have caused the fires.

LG ENERGY REBUTS MINISTRY EXPLANATION

After the ministry’s announcement, LG Energy said it doesn’t believe its battery cells are to blame because fires didn’t break out during a state-run institute’s lab tests of the batteries.

LG Energy rebutted the ministry's blame for battery cell defects but said it will continue to cooperate with the ministry's further investigations to determine the exact cause of the fires.

A total of 14 battery-related fires, including four overseas cases, have been reported since the Kona EV's launch in 2018, according to Hyundai.

Write to Byung-wook Do and Sun A Lee at dodo@hankyung.com
In-Soo Nam edited this article.
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