Wednesday, October 8, 2025

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General Motors Announces Another Extremely Costly Bolt Electric Vehicle Recall; Negative Implications for EV Industry

After the market close on Friday, August 20 (a typical timeslot when companies release bad news), General Motors Company (NYSE: GM) announced that is recalling 73,000 additional models of its Chevrolet Bolt EV at an incremental cost of around US$1 billion.

This brings the total number of Bolts to be recalled to around 143,000, and the aggregate recall cost to an astonishing US$1.8 billion. On August 4, GM estimated that the initial ~70,000 unit recall, which was announced in late July, carried a price tag of US$800 million.

The July 2021 recall covered 2017-2019 model Bolt EVs outfitted with older version batteries made by the South Korean battery manufacturer LG. Those batteries were determined to have two potential defects in the same battery cell — a torn anode tab and a folded separator — which in turn increases the chances of a battery fire.

GM said then that newer model Bolts were equipped with LG batteries made using a different process and therefore did not need to be recalled. In the August 20 announcement, GM reversed its stance and said that 9,335 additional 2019 Bolt EVs and nearly 64,000 models from 2020 through 2022 were subject to the same risk. GM said it is discussing some form of reimbursement from LG.

A Number of Other EV Manufacturers Have Been Forced to Implement Recalls as Well

GM is not alone in being forced to recall some of its EV models. Over the last twelve months, at least three other manufacturers have issued recalls on their models, two of which were over battery issues. Indeed, Hyundai incurred nearly US$1 billion to replace the batteries in two of their electric vehicle models.

MakeModelDate of Recall# of Cars RecalledIssue
GMChevrolet Bolt Nov-2070,000Software update on battery.
GMChevrolet Bolt Jul-2170,000Potential battery defect that can cause a fire.  GM set aside US$800 million to cover recall cost.
GMChevrolet Bolt Aug-2173,000Same issue as July 2021 recall. Additional cost could be US$1 billion.
FordFord Mustang Mach-EMar-211,258Subframe bolts did not meet specifications.
HyundaiIoniq EV, Elec CityFeb-2182,000Hyundai replaced batteries after reports of 15 fires involving these vehicles. Recall cost was US$11,000 per vehicle. 
BMW530e, other models Oct-204,509Welding debris left inside battery pack could create a short circuit between battery modules.

GM Recall News Could Have Chilling Effect on EV Investors

The GM news comes at an inopportune time for EV manufacturers and investors. So far in 2021, the performance of EV stocks has generally ranged from poor (Lucid Group) to extremely poor (Canoo and Lordstown Motors). A chief reason for the underperformance is investor concerns about the magnitude and duration of the cash burn in the industry. For example, Lordstown Motors appears to be on pace to burn around US$800 million over just the calendar year 2021. The giant cost of the GM recall has to add to these concerns.

In the figure above, the performance of selected EV stocks since December 31, 2020 is shown versus that of the S&P 500. The S&P 500 and each of the stock prices are presented in index form where 100 is the uniform starting point. The S&P 500 has dramatically outperformed all EV start-up companies.

General Motors Company last traded at US$49.80 on the NYSE.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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