General Motors Co. said Friday that it expects to be reimbursed for battery recall costs from its supplier and sees a "more stable year" for chip supply in 2022.
GM is in talks with battery supplier LG Chem over the costs of its Bolt electric vehicle battery recall, which has resulted in a $1.8 billion charge. The company expects to get reimbursement from LG, Chief Financial Officer Paul Jacobson said, although it was unclear if that would be full or partial.
The easing of the chip supply crunch, meanwhile, will likely come only after a further deterioration this year that has led to the idling of key truck plants. GM now expects the shortage to cut wholesale volume by about 200,000 cars in North America during the second half of the year, double the units it had expected earlier, Jacobson said.
The Detroit-based carmaker said pre-tax margins of 10% in North America will be "quite achievable" in 2022 amid its transition to produce more electric vehicles. In the second quarter, GM reported a 12% margin, excluding items taxes and interest. In a conference call at the time, Jacobson said a 10% margin in North America is sustainable.
Used car prices, which have soared this year amid strong demand and low inventory, will also probably see a little "normalization" next year, Jacobson said.