TUESDAY, 12^th October, 2021: LG Electronics has agreed to pay General Motors up to the sum of $1.9 billion to recall and fix Chevrolet Bolt electric vehicles due to apparent fire risks caused by faulty batteries supplied by LG.

According to General Motors (GM), the makers of Chevrolet, the manufacturing problems occurred at LG Battery Solution's plants in South Korea and Michigan. The "rare manufacturing defects" in the Bolt EVs are a torn anode tab and folded separator that when present in the same battery cell increase the risk of fire.

Due to the problem experienced with bolt, which is General Motor's flagship mainstream electric vehicle, the automobile manufacture has recalled every one of the electric cars it has produced since production began in 2016.  It added that the faulty batteries have caused at least 13 vehicles to catch fire.

According to reports from GM today, fixing the vehicles, including completely replacing some batteries entirely is estimated to cost $2 billion, which is an increase from the previous estimation of $1.8 billion.

The settlement between the companies is a major win for the General Motors, which missed Wall Street's expectations in the second quarter due to setting aside money related to the expected recall costs.

As a result of the agreement, GM will recognize an estimated recovery in the third-quarter that will offset $1.9 billion of $2.0 billion in charges associated with the recalls. The automaker previously said it was pursuing reimbursement from LG.

The Vice President of GM's global purchasing and supply chain, Shilpan Amin, said in a statement, "LG is a valued and respected supplier to GM, and we are pleased to reach this agreement. Our engineering and manufacturing teams continue to collaborate to accelerate production of new battery modules and we expect to begin repairing customer vehicles this month."

The settlement comes as the companies are building two battery plants in the U.S. through a joint venture called Ultium Cells LLC. The plants in Ohio and Tennessee will produce GM's next-generation batteries called Ultium.