Updated 26 February 2021 at 20:02 IST
Hyundai's recent recall highlights how expensive EVs can be: Read details
Hyundai Motor Co.’s recall of nearly 82,000 electric vehicles puts forward how costly the shift to the industry’s new frontier can be for automakers.
- Republic Business
- 2 min read
Hyundai Motor Co.’s recall of nearly 82,000 electric vehicles puts forward how costly the shift to the industry’s new frontier can be for automakers. This is keeping in mind both the balance sheet and the bank. According to a report by Bloomberg, the recall affects Hyundai’s best-selling electric Kona crossover and stems from fire risks in battery cells produced in China by LG Energy Solution Co. Also, it is expected to cost about 1 trillion won.
The delay in launches
This will be reflected in the results of quarter four. However, the final stage will be based on negotiations with LG Energy, which is a South Korean automaker. Bloomberg Intelligence analysts Steve Man and Joanna Chen said that the figure equals nearly half of Hyundai’s 2020 net income. Also, they underscore the prominent financial risks and brand damage that can be caused from new EV rollouts.
The government’s investigation into the issue of battery fires can also lead to a delay in the launches and even impact the sales. According to the reports by Yonhap news, globally, there have been 16 reported cases of Kona EVs catching fire. The latest recall focuses on the one announced in October involving more than 25,000 Kona EVs.
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In another significant development, Hyundai Motor Co. has said that they are in the initial phase of talks with Apple Inc. to jointly develop an electric vehicle. Reports that the Cupertino-based tech giant is secretly developing a battery-operated car codenamed 'Project Titan'. According to The Korean Economic Daily, an official from Hyundai Motor, in the month of January, confirmed that Apple is in discussions with various automobile companies, including Hyundai, to collaborate on its electric vehicle project.
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Following the Hyundai official's remark, the company released a statement through a regulatory filing, saying it has been receiving requests from various companies to jointly develop self-driving electric vehicles, adding the talks are still in the initial phase. After the statement, stocks of Hyundai and its sister companies surged on the Korean big board. It recorded an eight-year high with a jump of 25% to 2,57,000 won on Friday. Stock prices of Kia Motors Corp. and Hyundai Mobis Co. also rose on Friday.
Published By : Akanksha Arora
Published On: 26 February 2021 at 20:02 IST