Hyundai issues massive electric vehicle recall due to fire risk

Recalls in the automotive industry certainly aren't anything new; they happen all the time. What is new is a massive recall that impacts only electric vehicles issued recently by Hyundai Motor that will cost about $900 million. The recall will have Hyundai replacing battery systems in about 82,000 electric cars worldwide due to a risk of fire.

The massive recall will be among the first that shows how automotive manufacturers and battery makers will pay for this type of massive and extremely costly recall. This is one of the first mass battery pack replacement recalls conducted by any major automotive manufacturer. It's also considered very significant as we are still early in the EV era.

Analysts see this recall as setting a precedent for how other manufacturers will handle similar recalls in the future. Most of the vehicles covered in the recall are Hyundai Kona EVs, the best-selling electric car made by Hyundai. This isn't the first recall for this specific group of electric vehicles. Last year the same vehicles were recalled for software upgrades after a rash of fires occurred.

Hyundai's battery maker is LG Energy Solution, and it has been deflecting blame onto Hyundai for the issue. LG issued a statement saying Hyundai had misapplied its suggestions for fast-charging logic in the battery management system. LG says explicitly that the battery cell should not be seen as the direct cause of the fire risk. However, the South Korea transport ministry has issued a statement saying some defects have been found in some battery cells produced by the LG Energy factory in China.

Hyundai has offered no official comment on the cause of fires. Shares of Hyundai have declined 3.9 percent on word of the recall, while shares for LG Chem are down 2.8 percent. Hyundai has reportedly told some analysts that an agreement on how costs will be split will be worked out over the next week. Nearly 76,000 Kona EVs built between 2018 and 2020 are covered in the recall, with about 25,000 of those sold in South Korea. Some Ioniq EVs and Elec City buses are also covered in the recall. Owners are advised to limit battery charging to 90 percent of capacity until the battery has been replaced.