October 20, 2021

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What the Chevy Bolt Fires Mean (and Don’t Mean) for GM’s Electric-Car Plans

General Motors (NYSE:GM) was one of the first major automakers to go all-in on electric vehicles. But it’s now dealing with an expensive recall of its first long-range EV, the Chevrolet Bolt, after a series of vehicle fires. Is GM’s EV push in trouble? 

In this Motley Fool Live broadcast, recorded on Sept. 23, “Industry Focus” host Nick Sciple and Motley Fool senior auto specialist John Rosevear looked a little deeper at the story behind the story of GM’s Chevy Bolt recalls and how it’s likely to play out as GM and a key supplier scramble to fix the affected cars.

A transcript follows the video. 

Nick Sciple: So moving on from Ford Motor Company to GM, we’ve got some good news with GM, we’ve got some bad news with GM. We’ll start with the bad news. First, we’ve got an ongoing recall of the Chevy Bolt EV, have told owners not to park within 50 feet of other cars due to fire risk. What’s going on here?

John Rosevear: This is — it’s egg on GM’s face, to some extent. But it looks like the problem is with battery cells, which is on their supplier LG Chem. It may have been a manufacturing issue. GM is going to do the right thing here. They’re not necessarily going to do the right thing in the most polished and PR friendly way, as we’ve seen. But they do think they have a fix for it now and they are going to replace all the battery packs. My assumption is that LG is going to end up funding some of this that they were both on it together — which is a reasonable outcome. If we can get owners back on the road quickly, then I think this won’t matter a whole lot in the long run, but if it drags out a whole lot longer, I don’t think it hurts electric vehicle adoption in America, but it’s going to be something for GM to overcome.

Sciple: Yeah, it’s one of these things we will see pop up more and more often. There’s a long history of recalls into that traditional auto business. I don’t think there will be anything different in electric vehicles, but figuring out who’s responsible for what, I’m sure there’s going to be some lawsuits back and forth between GM and LG trying to figure out how that works. And then insurance companies trying to figure out how to underwrite total cost of life because, of course, there’s going to be less maintenance and things like that to go wrong. But if the battery catches fire and the whole thing blows up, of course, that’s a catastrophic loss. We’re still early days in this business, and some of these vehicles have just now been out on the road long enough that things that wouldn’t have presented in, and maybe your normal testing, will start to present in the real world. We’ll see more of this type stuff.

Rosevear: Truth.

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