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GM convinced LG to pay for almost all of the massive Bolt battery recall

LG is going out of pocket for around $1.9 billion to keep GM happy ahead of the start of the Ultium battery blitz.

2019 Chevy Bolt
With 143,000 of these lil' cuties likely needing new battery packs, there's going to be a big bill to pay.
Antuan Goodwin/Roadshow

When General Motors announced recently that it was going to have to recall the majority of its Chevrolet Bolt EVs for battery replacement, we knew that it was going to be expensive. Like, billions of dollars expensive, which, as the Fat Boys taught us, is a lot. Indeed, that's a considerable cost to eat, but according to a report published Tuesday by Automotive News, it may not be General Motors that eats the bulk of it.

That's because the company that produced the cells -- that's LG for those of you playing at home -- will. General Motors announced on Tuesday that it reached an agreement with the supplier that would see LG paying an estimated $1.9 billion, with GM handling the remaining balance of the projected $2 billion cost. Not a bad deal for GM, all things considered.

But why would LG agree to pay so much for this recall when technically, it's GM on the hook? The answer to that question is likely Ultium. LG is GM's battery partner for its forthcoming Ultium-powered electric vehicle onslaught, so perhaps LG is treating this experience as a downpayment on future boatloads of sweet EV cash.

The downside to that plan is that GM has set a precedent, and if something goes wrong with the new battery tech, it could use that as leverage to get LG to pay again. It's a gamble, for sure, but clearly, one that LG feels is worth it.

We reached out to LG for comment but didn't hear back in time for publication.

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