This is possibly not the biggest but the most expensive recall ever for Electric Vehicles. Hyundai’s electric cars have been subject to battery-related problems and quite recently around 25,000 came out to be affected by it. The recent news is about affected 82,000 vehicles which are recalled due to fire risk and Korean company will be replacing the batteries of them all.
The total cost of the recall would reach around $900 Million, which for instance is to equal some of the company’s total worth. The bill is said to be shared by Hyundai, the vehicle manufacturer, and LG Energy Solution, who builds the battery packs for the vehicle. Hyundai and LG have already collaborated on several other ventures, together.
This recall is the first of its kind that the battery pack would be replaced at this mass level by an automaker. Think of a defective toy and company calling the customers to replace 82,000 AA-sized cells now think about it in terms of a full-sized car. It is a lengthy, expensive and tiring procedure.
“It’s very significant for both Hyundai and LG as we are in the early stages of the electric vehicle era. How Hyundai handles this will set a precedent not just in South Korea but also for other countries,” -Lee Hang-Koo, Senior researcher, Korea Institute for Industrial Economics & Trade
The cars mostly include the Kona EV which is Hyundai’s best-selling electric car. Which was previously also recalled for a software update which caused heating issues of the battery pack. One of the cars that were recalled again caught fire in January which we covered sometime back. It certainly means there is more to the battery pack than just the software recall, to which South Korean authorities ordered an investigation over the credibility of the first recall.
LG Energy Solution which is a division of LG Chem Ltd. took no time in blaming Hyundai. They said Hyundai misinterpret their suggestions on the fast-charging logic in the battery management system and further added that battery cell is not the direct cause for the fire risks.
On the other hand, the South Korean authority has mentioned that the defects lie in the battery cells produced by the LG Energy factory based in China. There’s no comment by Hyundai on the issue of fire risk. The cloud of bad news has showered down on the stock market and hence plummeting Hyundai’s share by around 4% and LG Chem by around 3%.
There are rumors about both companies splitting the total cost of the recall. And this might take some time before Hyundai comes out with a solid statement. The other vehicle that is affected is the Ioniq EV that is also sold in the American market as well.
There are 76,000 Kona EVs affected which were built between 2018-2020, and 25,000 of these units were sold in South Korea alone. The rest remainder of the 82,000 affected vehicles includes the Ioniq EV models, and other vehicles are the Elec City buses.
The total cost of the recall is estimated to be 1 trillion won which translates to $900 million, this already includes the 38.9 billion won spent on the first recall. There have 15 reported cases of fire around the world. Hyundai for now has advised the customers to charge the battery no more than 90 percent to save any kind of risk that might be caused due to overcharging.