Why GM, Tesla Supplier LG Chem's Stock Got Hammered In Seoul Today

South Korean battery supplier LG Chem Ltd, battery supplier to Tesla Inc TSLA and General Motor Co GM saw its shares trade 11.3% lower on Monday in Seoul.

What Happened: The plunge comes after the Detroit-based GM said it is recalling more than 73,000 of its Chevrolet Bolt electric vehicles due to the risk of their batteries catching fire.

GM said on Friday the recall would come at a cost of $1 billion to address the fire risks. The automaker added it will seek reimbursement from battery supplier LG and would indefinitely halt sales of the EVs due to the issue.

The latest recall covers vehicles from model years 2019 through 2022. 

Earlier this month, GM announced a $800 million write-down in the second quarter that was related to the second recall of 68,000 2017-19 Chevrolet Bolt EVs for potential fire risk. LG Electronics, which assembles cells manufactured by LG Chem, cut its second-quarter operating profit by more than a fifth to reflect costs for the GM recalls. 

Price Action: LG Chem shares closed 11.5% lower at KRW 798,000 in Seoul. GM shares closed 0.57% lower at $48.80 in New York on Friday.

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Photo: Courtesy of 2020 Chevrolet