SEOUL, Aug. 10 (Korea Bizwire) — LG Electronics Inc. and LG Chem Ltd. on Tuesday decided to set aside a combined 325.6 billion won (US$282.8 million) in provisions for costs related to General Motors (GM) Co.’s Chevrolet Bolt electric vehicle (EV) recall as they revised down their second-quarter operating profits.
In a regulatory filing, LG Electronics said it reflected 234.6 billion won as provision expense for GM’s Bolt EV recall. LG Chem, the parent of battery maker LG Energy Solution Ltd., booked 91 billion won.
With the latest provisions, LG Electronics revised its second-quarter operating profit to 878 billion won from the previously announced 1.11 trillion won. LG Chem also cut its operating profit in the April-June period to 2.13 trillion from 2.23 trillion won.
Last month, GM issued a second recall for some 68,000 Bolt EVs produced between 2017 and 2019 over potential fire risks.
LG Electronics has supplied GM with battery modules that are made with battery cells from LG Energy Solution.
The two South Korean companies said they are fully working with GM to analyze fire risks, adding that depending on the recall process and their investigation results, the amount of their provisions could change in the future.