Hyundai is charged with EV fires when GM launches the recall

© Reuters. FILE PHOTO: The Hyundai Motor logo is pictured on the second media day of the Shanghai Auto Show in Shanghai

By Heekyong Yang and Hyunjoo Jin

SEOUL (Reuters) – Hyundai Motor Co is being sued over a series of battery fires in its electric vehicles, just as General Motors Co (NYSE 🙂 is recalling nearly 70,000 electric vehicles with batteries from the same manufacturer, LG Chem Ltd.

The owner of a Hyundai Kona EV, a South Korean official who wanted to be identified by just his last name, Kim, is among the 200 or so people who filed a class action lawsuit against Hyundai last week for compensation for what they believe Kim and two lawyers representing her told Reuters the value of their electric vehicles and other losses.

The judicial filing is not a public record.

Kim had launched a petition to sue the Seoul-based automaker after the same brand of electric vehicles caught fire in his neighborhood and forced about 20 residents to evict their homes.

One of the attorneys said they were targeting 8 million won ($ 7,200) per plaintiff initially, but they could increase demand as the trial progresses.

Plaintiffs want Hyundai to replace the entire battery – the most expensive part of the vehicle – of their Kona electric vehicles, rather than just update the software, as the company’s recall provides.

Electric vehicle sales are increasing around the world as technology delivers on the promise of cleaner transportation, costs decrease and range increases. However, the emerging fire hazard from overheated batteries could set the entire industry back.

Recalls could mean reputational as well as financial damage to Hyundai and other automakers entering the electric vehicle market to meet stricter emissions regulations and challenge market leader Tesla (NASDAQ 🙂 Inc. The issues could also affect consumer demand for electric vehicles.

“A battery that is not safe is like a bomb,” said Park Chul-wan, a South Korean battery expert.

A number of fires involving automakers, including GM, Bayerische Motoren Werke AG (BMW), and Ford Motor (NYSE 🙂 Co, represent the challenge the industry is facing in managing the risks of new technologies and pressures Faced with increases in battery production and performance.

GM said Friday that it is recalling 68,677 electric vehicles with LG Chem batteries after five reported fires and two minor injuries. Hyundai has recalled more than 74,000 Kona electric vehicles worldwide, its top-selling electric car, after 16 of them caught fire in two years in South Korea, Canada and Europe.

The South Korean security agency is investigating the cause of the Kona fire. Depending on the results, Hyundai and LG Chem could cost up to $ 540 million if they had to replace all affected batteries, analysts reckon.

In a statement to Reuters, Hyundai said the cause of the fire was unclear but suspects internal damage to batteries may be to blame and is investigating the case with its supplier and the Department of Transportation.

Hyundai said it wasn’t considering spending money on recalls as it expects its software fix can prevent fires by detecting problems.

“We are constantly monitoring the situation after an update of the (battery management system) and will continue to try to minimize the inconvenience for consumers in the future,” said Hyundai.

A LG Chem spokesman said, “We will work with Hyundai Motor and General Motors and sincerely conduct an investigation to determine the exact cause of the fire.”

Hak Cheol Shin, CEO of LG Chem, told Reuters last month that the battery system was very complex, suggesting that problems could be caused by other components from Hyundai’s suppliers.

“As a supplier of a key component of the battery system, we feel clearly responsible. But until a clear cause is identified, we cannot find any measures to correct the problem,” he said.

In addition to the problems at Hyundai and GM, Ford recently offered to replace the batteries on its Kuga plug-in hybrid vehicle due to fire risks. That could cost the automaker $ 600 million in the second half of the year, including the cost of covering European emissions regulations.

Ford and BMW have recalled vehicles with Samsung (KS 🙂 SDI co-batteries, citing defects in cell production. A Samsung SDI spokesman said investigations into the cause of the fires are underway.

Tesla was investigated by a US security agency over a battery software upgrade of some vehicles after vehicle fires.

‘FRIGHTENED’

Hyundai and LG Chem are at odds over the root cause of the fires as the South Korean security agency investigates the case. LG denies that the battery cells are defective.

Plaintiffs urge Hyundai to take more determined action. “While you have admitted faults in the batteries, your company has been relying on the wrong policy – software replacement which is only a temporary fix – to buy time,” a letter to the automaker said in a letter to Reuters Has.

A 35-year-old woman who only wanted to be identified by her last name, Shin, said she had to evacuate her apartment complex at dawn last month with her baby in a stroller after a Kona-EV caught fire and went up in flames.

“The stench of burnt electronics and smoke swept through the whole neighborhood,” Shin told Reuters.

Before the fire, she believed that electric vehicles were good for the environment. Now, she says, she tells her relatives not to buy them.

“Electric vehicles have become something I’m so scared of.”

($ 1 = 1,105,2800 won)

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