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General Motors Stock Slumps After $1 Billion Expanded Chevy Bolt Recall

GM said its expanded Chevy Bolt recall will cost the carmaker $1 billion, but pledged to seek reimbursement from battery manufacturer LG Chem Ltd.

General Motors  (GM) - Get General Motors Company (GM) Report shares slumped lower Monday after the carmaker extended the recall of its Chevy Bolt to include all worldwide sales of the electrified sedan since 2019.

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. The expanded recall will cost the carmaker around $1 billion, GM said, adding it would seek reimbursement from Korea-based battery manufacturer LG Chem Ltd. 

“Our focus on safety and doing the right thing for our customers guides every decision we make at GM,” said GM vice president Doug Parks. “As leaders in the transition to an all-electric future, we know that building and maintaining trust is critical. GM customers can be confident in our commitment to taking the steps to ensure the safety of these vehicles.” 

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General Motors shares were marked 3% lower in early trading Monday to change hands at $47.33 each, a move that would trim the stock's year-to-date gain to around $15%.

GM shares have fallen more than 17% since early August amid a series of supply-chain concerns following a warning from Toyota  (TM) - Get Toyota Motor Corp. Sponsored ADR Report that the world's biggest carmaker would produce around 360,000 cars worldwide next month, a 40% reduction from its recent average.

World number two Volkswagen  (VWAGY) , meanwhile, cautioned last week that the "supply of chips in the third quarter to be very volatile and tight" and said it can't rule out a cut to its production schedule over the coming months.