What to consider when making the switch to an electric vehicle

General Motors and LG are establishing a $150 million fund to compensate Chevrolet Bolt owners after a faulty battery caused some of the electric vehicles to burst into flames. 

The $150 million is part of a legal settlement between GM and Bolt owners who filed a class-action suit against the Michigan automaker in 2020 for allegedly selling them a vehicle with a defective battery. Bolt owners who installed special software that GM offered to fix the battery issue can receive $1,400 from the fund, according to court documents filed late Thursday in Michigan. Bolt owners who sold their car before that date, or drivers who leased the Bolt before then, are eligible for a $700 payment, according to the documents. 

"GM, LG Energy Solution and LG Electronics have agreed to a settlement with plaintiffs to resolve class-action litigation related to the Bolt EV battery recall," GM said in a statement on Friday. "As a result, Bolt owners who received a battery replacement or who have installed the latest advanced diagnostic software may qualify for compensation."

GM partnered with subsidiaries of South Korea-based electronics company LG to create the batteries used in the Bolt, which debuted in 2015. In the following years, drivers noticed their cars would spontaneously catch fire, leading to owners to file complaints about the problel with GM and the National Highway Traffic Safety Administration. 

GM traced the fires to a manufacturing defect in the battery modules, which the automaker said caused a short in the battery cell. Some of the incidents took place in Bolts with battery cells made in South Korea, while other fires came from cells made at a LG plant in Michigan. In 2021, GM recalled all Bolts worldwide.

GM sold just under 25,000 Bolts in the U.S. before telling dealers to stop selling them. The company ceased production of the vehicle in December of 2023, a major financial and reputational blow for GM as automakers raced to enter the electric vehicle market. The automaker has spent $1.8 billion recalling the Bolt because of its battery issues. 

The Bolt was one of GM's first all-electric vehicles, second only to the Spark EV, which debuted in June 2013. Since then, GM has rolled out an electric Hummer, Chevrolet Silverado and Cadillac Lyriq. 

GM has said it plans to stop manufacturing gas-powered cars by 2035 and will spend $35 billion to roll out more than 30 new EVs globally by 2025, including about 20 in North America. By the end of the decade, GM expects to generate $90 billion in additional annual revenue from EVs.

In:
• GM
• Electric Vehicles
• Electric Cars
• Chevrolet

Khristopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.

Twitter