Hyundai’s recall is one of the most expensive in history, signaling how electric car defects could create hefty costs for automakers. Rabeya Lima reports.
Here are everything’s we need to know:
- The recall includes 27,000 Korean vehicles and 55,000 elsewhere in the world.
- Move to replace fire-prone batteries will cost South Korean carmakers about $900m. On a per-vehicle basis, the average cost is $11,000.
- “Our priority is to dispel potential risks against customer safety despite the low possibility of fires and high financial burden,” Hyundai said in a statement on Wednesday.
- The US National Highway Traffic Safety Administration estimated last October that there are 6,700 electric Hyundai Konas, the US version of the affected vehicles, on American roads.
- Globally, there have been 16 reported cases of Kona EVs catching fire, including in Canada and Australia in 2019. The latest recall follows one announced in October involving more than 25,000 Kona EVs. That was also based on the fire risk associated with LG Energy batteries. Over 5,700 Ioniq compact EVs and 305 Elec City buses are also being recalled this time.
- The decision to replace the batteries is likely to set a precedent in the fast-growing electric vehicle industry, where carmakers including GM, Ford, and BMW have made a series of recalls, all of which cited fire risks.
“Overall, battery safety and durability will be increasingly important if auto companies want to avoid some of the large battery-recall costs that have befallen the consumer-electronics industry,” according to Mike Held, a director in the automotive and industrial practice at AlixPartners, a global consulting firm.
