Hyundai Electric Vehicle Recall Among Most Expensive in History


Korean automaker Hyundai is stinging after their massive electric vehicle recall balloons to become one of the most expensive recall efforts in history. The company is planning to recall some 82,000 electric vehicles, all in order to replace their batteries after 15 of the models caught fire. While the recall affects a relatively small number of vehicles, on the whole, it’s proving to be extremely costly for the company.

This, in turn, has led to fears that traditional automakers might be biting off more than they can chew when they sign up for production of all-electric cars. At least in the near future, the batteries in EVs aren’t expected to become any cheaper. And, should an automaker make an error like Hyundai’s, they could be on the hook for millions of dollars in recall damage.

The High Cost of Doing Business

The cost of Hyundai’s manufacturing mistake is eye-watering, coming in around one trillion Korean won. Converted to US dollars, that’s around $900 million, nearly a billion dollars. Broken down per-vehicle, that’s about $11,000 per each vehicle affected under the recall. That is unheard of, to say the least. The company is on the hook for a massive amount of repairs to the electric vehicles.

Having to replace the entire battery in an EV is essentially the same kind of repair as replacing the entire engine in a traditional vehicle. Few recalls in recent memory involved such a drastic measure. Notably, in 2014, Porsche’s 911 GT3 required a recall and full engine replacement on 785 models. Porsche did not disclose how much that recall cost them, but it was certainly more per vehicle than the Hyundai recall.

However, 785 vehicles would have been a welcome amount for Hyundai to need to recall compared to the actual number. They have some 82,000 EVs on the streets that need to be brought in for a full battery replacement.

Economy of Scale

In the near-term, it is critical for automakers that their EVs are checked and double-checked for any errors like this. The economy of scale to make the batteries as affordable as gas-powered engines simply aren’t in place—yet. In time, as EVs become the norm, not the exception, recalls like this will become much less debilitating.

For now, however, Hyundai is left smarting after running the numbers. With any luck, this incident will help them tighten up their safety testing and prevent future battery fires from endangering drivers.