SEOUL, March 4 (Korea Bizwire) — Hyundai Motor Co. said Thursday it has agreed with LG Energy Solutions Ltd. on their cost sharing ratio for the replacement of LG-made batteries in three Hyundai EV models.
Hyundai Motor will take up 30 percent of the replacement costs, with LG Energy making up for 70 percent, a person with direct knowledge of the matter told Yonhap News Agency.
Last month, Hyundai said it will replace batteries in some 82,000 Kona EV, IONIQ EV, and Elec City buses sold globally due to potential fire risks, which could cost about 1 trillion won (US$899.7 million).
The battery system subject to the replacement was manufactured by LG Energy between November 2017 and March 2020. LG Energy is a key affiliate of the country’s leading chemical firm LG Chem Ltd.
The two companies said they have reflected their share of replacement costs in their fourth-quarter bottom line as provisions.
On Thursday, Hyundai reported a revised net profit of 1.18 trillion won, down from its earlier net profit of 1.38 trillion won, as it reflected 390 billion won worth of battery-related costs in the quarterly results.
The massive replacement of combustible EV batteries came after the automaker unveiled the IONIQ 5, the first EV model embedded with its own EV-only electric-global modular platform (E-GMP), late last month to compete against global rivals, such as Tesla Motors Inc.
The maker of the Sonata sedan and the Palisade SUV said it will launch the IONIQ 5 in Europe next month, in the domestic market in the second quarter and in the United States and other markets later this year.
It set a global sales goal of 70,000 units this year.
To strengthen its presence in the eco-friendly vehicle market, Hyundai also plans to introduce the IONIQ 6 midsize sedan in 2022 and the IONIQ 7 large SUV in 2024.
It will begin using alphanumeric names, like its bigger rivals, such as BMW, whose models are named Series No. 1-8.