The Hyundai Motor Co (005380.KS) is facing the heat of lawsuits over a string of battery fires in its electric vehicles (EVs), according to SEOUL (Reuters).
Meanwhile, General Motors Co (GM.N) recalls nearly 70,000 EVs with batteries from the same maker, LG Chem Ltd (051910.KS).
How Did This Happen?
Till last week, 200 people have lodged a class-action lawsuit against Hyundai.
Amongst them, a South Korean civil servant named Kim, the owner of Hyundai Kona EV seeks compensation for what they say is the reduced value of their EVs and other losses.
Kim and his two lawyers representing them informed as the court filing is not a public record.
Kim has gone ahead and initiated a petition drive to sue the Seoul-based carmaker.
The move was followed by the incident when the same brand of EV caught fire in his neighborhood, forcing about 20 residents to evacuate their homes.
Initially, they were seeking 8 million won (£5,435.6) per plaintiff but they could increase demand as the trial proceeds, according to one of the lawyers.
Plaintiff’s Demand
Further, the plaintiffs are demanding Hyundai to replace the entire battery pack, which is the most expensive part of the vehicle of their Kona EVs.
Normally a company’s recall provides software updates.
So far, EV sales are increasing globally since the technology promises cleaner transportation, with costs falling and driving ranges increasing.
But the unfolding risk of catching fire from overheated batteries could become a reason for the set back of the entire industry.
Here the plaintiffs are asking for recall, which also means reputational as well as financial damage to Hyundai and other automakers.
EV Automakers Struggle
Currently, these automakers are struggling in the EV market to meet tougher emissions regulations and to challenge market leader Tesla Inc (TSLA.O).
This move could also leave a dent in consumer demand for EVs.
According to a South Korean battery expert, Park Chul-wan, “A battery that is not safe is like a bomb,”.
Here, a series of fires involving automakers, such as GM, Bayerische Motoren Werke AG (BMW) (BMWG.DE) and Ford Motor Co (F.N).
Basically, this situation is also highlighting the challenges that this industry is facing in managing the risks of new technology and the pressures to boost battery production and performance.
After five reported fires and two minor injuries, GM is recalling 68,677 EVs with LG Chem batteries, on Friday.
In the case of Hyundai, they have also recalled more than 74,000 Kona EVs globally.
Kona EV is their top-selling electric car, but they had to recall after 16 of them caught fire in South Korea, Canada and Europe in two years.
Currently, South Korea’s safety agency is investigating the cause of the Kona fire.
Hyundai and LG Chem could face costs up to $540 million if a situation came to replace all the affected batteries, depending on the investigation results.
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