GM (General Motors), LG Energy Solution and LG Electronics have reached a settlement to establish a $150 million fund to provide relief to Chevrolet Bolt EV owners affected by defective batteries, according to documents filed in a USA court on Thursday.
Background
The Chevrolet Bolt EV, first launched by GM in 2015, uses batteries made by LG as part of a business partnership. The issue of defective batteries came to light when GM started issuing recalls in 2020 following numerous complaints about fires in certain vehicles. This defect has led to significant legal and financial consequences for the companies.
Settlement Agreement
“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 stated in an emailed message to Reuters. The settlement aims to compensate affected Bolt EV owners who have either received a battery replacement or installed the latest advanced diagnostic software.
Compensation
Owners who had the final software remedy installed at a GM-authorized dealership before 31 December, 2023 may receive up to $1400 in the form of a Visa eReward card. Meanwhile, those who sold or terminated the lease of their vehicle before the software remedy became available as well as those who have already received a battery replacement, will receive a minimum payment of $700.
GM’s Recall Campaign and Production Halt
This settlement follows GM’s announcement in 2021 of a billion-dollar recall campaign to address the battery fire risks in thousands of Bolts. This recall campaign prompted GM to halt the production and sales of the Bolt EV for more than six months.
In 2023, GM ceased production of the Bolt EV to make room for new electric vehicle models. The recall and production halt have impacted GM’s plans and the electric vehicle market significantly.
Both GM and LG declined to provide further comments on the settlement when approached by Reuters.
