Shares of General Motors (GM) - Get General Motors Company (GM) Report were rising Tuesday afternoon after GM said that LG Electronics agreed to cover nearly all of the $2 billion cost of the automotive company's recall of the Chevy Bolt.
LG will be footing most of the bill due to a "manufacturing defect" in the South Korean electronics company's battery modules.
"LG is a valued and respected supplier to GM, and we are pleased to reach this agreement,” said Shilpan Amin, GM vice president, Global Purchasing and Supply Chain.
The company said it expects to report a recovery of about $1.9 billion from LG when it releases its third-quarter earnings results later this month.
GM says it will continue to work with LG on the production of new battery modules for the electric vehicles and expects to start "repairing customer vehicles this month."
The company's stock was rising 1.5% to $58.96 a share Tuesday at last check. The Detroit automaker's stock bottomed out at $48.18 on Aug. 23 after the company said it would extend the recall of the Chevy Bolt to include all worldwide sales since 2019.
Shares are up more than 40% year to date.
GM said the recall, which now covers 2019, 2020, 2021 and 2022 models of the Chevy Bolt, was expanded to address two manufacturing defects -- a torn anode tab and folded separator -- in the car's battery cell that could increase the risk of fire.
GM has recalled nearly all of the 142,000 Chevy Bolts it has produced since 2016.