Hyundai Motor Co.'s recall of nearly 82,000 electric vehicles highlights how costly the shift to the industry's new frontier can be for all the automakers piling in, to both their balance sheets and their brands.
The recall mostly affects Hyundai's best-selling electric Kona crossover and stems from fire risks in battery cells produced in China by LG Energy Solution Co. It is expected to cost about US$900 million (NZ$1.2 billion) and will be reflected in fourth-quarter results, though the final figure will be based on negotiations with LG Energy, the South Korean automaker said Wednesday.
The cost of Hyundai's recall equals nearly half of its 2020 net income and "underscores the significant financial risks and potential brand damage that can arise following new EV rollouts," Bloomberg Intelligence analysts Steve Man and Joanna Chen wrote Thursday.