Hyundai’s profit declines after recalling Kona EV

Hyundai’s profit declines after recalling Kona EV

March 7, 2021 0 By autotimesnews

Most of the costs of the recall campaign will be covered by LG Chem.

A major recall of the majority of Kona electric crossovers forced Hyundai Motor Group to sharply cut its fourth-quarter operating profit, although reports indicate that battery maker LG Chem will bear the bulk of the costs.

LG is reportedly going to take on 70% of the estimated $ 900 million in replacement battery systems in nearly 82,000 Kona vehicles worldwide. However, Cho Hyun Ryul, an analyst at Samsung Securities, said he estimated that LG’s burden was slightly less at 62% of costs.

The recall, which in large part concerns the Kona, Hyundai’s most popular electric car, is one of the first mass battery replacements produced by the automaker. He was followed closely as he set a precedent in how auto and battery manufacturers distribute bills when problems arise.

Hyundai said Thursday it is revising its fourth-quarter operating profit down 300 billion won ($ 265 million), or nearly a fifth, to 1.3 trillion won, while LG Chem cut its operating profit by more than 80% up to 119 billion won.