“LG’s swift agreement with GM on recalling Bolt electric vehicles provides clarity on the profit impact and the solidity of its partnership with GM,” Horace Chan, a Bloomberg Intelligence energy analyst, said in a note. “LG needs to ensure there are no more large-scale defects in the future, as investors’ patience has been stretched by a series of recalls over the past year.”
Last month, GM said it found a fix to avoid battery fires in the Chevrolet Bolt EV, and that manufacturing processes for lithium-ion batteries in the model and the larger Bolt EUV have been improved. GM linked the fires to two defects: folded separators and torn anode tabs.
Shares of LG Chem and LG Electronics closed up 4.2 percent and 3.3 percent, respectively, on Tuesday in Seoul with investors relieved that the uncertainty over the recall costs has gone.
LG Energy Solution added that it plans to resume working on its initial public offering, which had been suspended in August due to the lack of clarity over the recall costs.
Bloomberg, Reuters and Automotive News contributed to this story.
