LG Chem Ltd, which supplies batteries to EV giant Tesla Inc TSLA, has reportedly initiated a voluntary recall of certain models of home battery systems in the U.S.
What Happened: The South Korean company's home battery systems were involved in five fire accidents in the U.S., causing limited damage to property but no injuries, Bloomberg reported, citing a recall notice.
The fire accidents were caused due to overheating, the report said.
The affected units were sold by distributors, including Sunrun Inc RUN from January 2017 through March 2019, Bloomberg said.
LG Chem is reportedly working with the U.S. Consumer Product Safety Commission on the recall.
Related Link: Tesla Battery Supplier LG Chem Preannounces 159% Profit Growth
Why It's Important: LG Chem recently splintered its EV battery business, which is now the wholly owned subsidiary of LG Energy Solutions. The company is also nurturing ambitions to publicly list the company as a means of raising capital to support its expansion.
With battery demand from EV makers, including Tesla, on the rise, the company is planning to double its battery manufacturing capacity, according to a Reuters report.
Against this backdrop, the negative headline, though not related to the EV battery business, could come as a setback for the company.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
