Exclusive-Volvo Cars to recall 40,000 electric SUVs over battery fire risk

By Marie Mannes

STOCKHOLM, Feb 23 (Reuters) – Volvo Cars will recall over 40,000 of its flagship electric EX30 SUVs because their battery packs risk overheating, it told Reuters on Monday, a move that could dent the automaker’s hard-earned ‌reputation for safety and cost it millions of dollars.

The previously unreported recall involves replacing high-voltage battery packs in the ‌compact SUV that is a crucial model in Volvo’s push to compete with cheaper Chinese brands. Battery safety is a highly sensitive issue for EV makers ​and consumers.

A total of 40,323 EX30 Single-Motor Extended Range and Twin-Motor Performance cars with these high‑voltage cells are affected, the Swedish automaker owned by China’s Geely said in response to questions from Reuters.

” We are now contacting the owners of all affected cars to advise them of next steps,” Volvo said.

In the rush to develop new EVs, some automakers have faced battery defects. In 2020, a fire risk forced General Motors to ‌recall 140,000 Chevy Bolts with batteries supplied by ⁠South Korea’s LG Electronics, costing $2 billion to fix.

Volvo’s battery issues come as the carmaker pursues a 1.9 billion dollar savings drive and deeper integration with parent Geely. The batteries were made by a Geely-backed ⁠joint venture, Shandong Geely Sunwoda Power Battery Co. Volvo said the supplier has fixed the problem and would supply the new battery cells.

‘THEY HAVE TO GET IT RIGHT’

Volvo said it would replace affected battery modules free of charge, urging owners in the meantime to continue limiting charging to ​70% ​to eliminate the fire risk.

“The EX30 especially is very important to Volvo, ​so they have to get it right,” said Sam ‌Fiorani, vice president for global vehicle forecasting at research firm AutoForecast Solutions.

Since December, Volvo has told EX30 owners in more than a dozen countries including the United States, Australia and Brazil to park away from buildings and cap charging at 70%, according to regulatory filings and the company.

Andy Palmer, an industry veteran who oversaw the launch of Nissan Motor’s Leaf EV in 2010, said Volvo has less room for missteps than rivals as its reputation for safety is central to its identity.

“Volvo can’t afford a safety issue because ‌that strikes at the heart of their brand,” he said.

POTENTIALLY STEEP PRICE ​TAG TO FIX BATTERY ISSUE

The new EX30 battery packs alone could cost $195 million, ​excluding logistics and repair costs, according to a Reuters ​analysis based on what a Chinese battery maker might charge. Volvo said the calculations were “speculative in nature”, ‌and that the automaker was in talks with the ​supplier.

Prior to news of the recall, ​Reuters spoke to two EX30 owners who wanted to return their cars, underscoring the potential impact.

British insurance agent Matthew Owen said he chose the EX30 for its range and Volvo’s safety reputation, adding the automaker should take responsibility because it ​is “producing a car that is dangerous”.

Tony Lu, ‌an EX30 owner in New Zealand, said he faced higher costs because the charging cap had cut the car’s ​range.

“I would be absolutely delighted if they bought the car back,” Lu said.

(Reporting by Marie Mannes in Stockholm, ​Shanghai and Beijing newsrooms; Editing by Nick Carey and Emelia Sithole-Matarise)