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Hyundai to replace batteries in some 82,000 Kona, other EVs over fire risks

By Yonhap

Published : Feb. 24, 2021 - 13:50

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Hyundai Motor's Kona Electric (Yonhap) Hyundai Motor's Kona Electric (Yonhap)
Hyundai Motor Co. said Wednesday it will replace batteries in some 82,000 Kona EV and two other electric vehicles sold globally due to potential fire risks, which could cost about 1 trillion won ($899.7 million).

Hyundai will begin the replacement of the battery management system (BMS) in 75,680 Kona EVs, 5,716 IONIQ EV and 305 Elec City buses from March 29 in the domestic market and from April in overseas markets, the company said in a statement.

The battery system subject to the replacement was manufactured by South Korea's No.1 battery maker LG Energy Solutions Ltd. between November 2017 and March 2020. LG Energy is a key affiliate of the country's leading chemical firm LG Chem Ltd., it said.

Following the announcement, shares in Hyundai Motor fell 3.9 percent to 235,000 won and its affiliate Kia declined 4.7 percent to 75,000 won, underperforming the broader KOSPI's 2.5 percent loss.

The Ministry of Land, Infrastructure and Transport announced Hyundai's "voluntary" battery replacement plan for a total 26,699 units of the three models in the domestic market from March 29.

The ministry said it found some faulty battery cells made at LG Energy's plant in Nanjing from July 2017 to July 2019 carry potential risks of fires.

LG Energy rebutted the ministry's blame on battery cell defects but said it will continue to cooperate with the joint investigation to figure out the exact cause of the fire.

The state-run Korea Automobile Testing & Research Institute's (KATRI) lab tests showed that neither the battery's separator nor misaligned battery cells caused the fire in the vehicles, while Hyundai's battery management system was not appropriately applied in the fast-charging system, LG Solution claimed.

Hyundai's replacement decision comes after Hyundai made a global recall of faulty software in 77,000 units of the Kona EV's battery system, including 25,564 units in the domestic market, in October last year.

A total of 14 battery-related fires, including four overseas cases, were reported since the Kona EV's launch in 2018, Hyundai said.

In last year's recall, Hyundai upgraded the BMS to limit the maximum charging rate to 90 percent, but it failed to brush off safety concerns after a vehicle that had received the software update caught fire in the southeastern city of Daegu last month.

The replacement plan will cost around 1 trillion won, but Hyundai Motor and LG Energy will share the expenses after consultations, a Hyundai spokesman said over the phone.

The cost sharing ratio will be decided later and Hyundai plans to reflect its share of replacement costs in the fourth-quarter bottom line as provisions, he said.

In the October-December period, Hyundai's net profit jumped 78 percent to 1.37 trillion won from 772 billion won a year earlier helped by robust domestic sales despite the COVID-19 pandemic.

A day earlier, Hyundai unveiled the IONIQ 5, the first EV model embedded with its own EV-only electric-global modular platform (E-GMP) to compete against global rivals, such as Tesla Motors Inc.

The maker of the Sonata sedan and the Palisade SUV said it will launch the IONIQ 5 in Europe next month, in the domestic market in the second quarter and in the United States and other markets later this year. It set a global sales goal of 70,000 units this year.

To strengthen its presence in the eco-friendly vehicle market, Hyundai also plans to introduce the IONIQ 6 midsize sedan in 2022 and the IONIQ 7 large SUV in 2024. It will begin using alphanumeric names, like its bigger rivals, such as BMW, whose models are named Series No. 1-8. (Yonhap)