Electric vehicles have been riding a rising wave, but General Motors's latest move is twisting fate. GM (NYSE:GM) is recalling all of the remaining Chevrolet Bolt vehicles on the road, which adds about $1 billion to the company's losses in the process.
The recall stems from the fact that the Chevy Bolt is prone to dangerous fires. How's GM stock responding to the news, and what should Chevy Bolt owners across the globe do following the recall news?
All of the remaining Chevy Bolts worldwide are recalled now.
In November 2020, GM recalled 69,000 Chevy Bolt vehicles due to the fire risk. At the time, the model's lithium-ion batteries were known to experience spontaneous fires. However, that recall only impacted the 2017–2019 model years.
By late July, a second Chevy Bolt recall came to light after an eighth reported fire occurred in one of the vehicles. The Bolt batteries are located under the rear passenger seat area.
Now, all Bolts through the model year 2022 are being recalled worldwide, including the Bolt EUV. The issue stems from two manufacturing defects in the battery, including "a torn anode tab and folded separator," according to a GM press release.
The NHTSA contributed to the Chevy Bolt recall
Both the NHTSA (National Highway Traffic Safety Administration) and GM found safety issues when researching the spontaneous fires that occurred in Chevy Bolts.
While the NHTSA can't force a recall on its own, the organization does have the authority to impose fines up to $17.35 million per unit. Considering the fact that GM is recalling an additional 73,018 units in the U.S. and Canada (plus the nearly 70,000 already recalled), a voluntary recall makes fiscal sense.
What Chevy Bolt owners can expect
All drivers currently operating a Chevy Bolt are asked to park outside and not to charge the vehicle overnight. The issue seems to occur when the charge level exceeds 90 percent, so set your charging limit to that. There could also be potential issues if the battery gets below 70 miles of range, so avoid depleting your battery below that level.
GM said, "Out of an abundance of caution, GM will replace defective battery modules in Chevrolet Bolt EVs and EUVs with new modules, with an expected additional cost of approximately $1 billion."
The automaker reports that it will reach out to customers as replacement parts become ready.
GM stock is trending downward following the recall shock.
Overnight, GM stock fell nearly 3.5 percent. This adds to an existing correction, with the stock down 14.29 percent over the last month. The behemoth automaker will need to ensure that its numerous upcoming EV models can pass the safety test with even more scrutiny than before. GM still plans to launch 30 EV models globally over the next few years.