TLDRs;
- Hyundai recalls 37,690 EVs, Kia 1,590, due to potential battery fire risks in South Korea.
- Battery management system software may delay overheating detection, raising safety concerns.
- Current recall follows a costly 82,000-unit Kona Electric battery replacement in 2023.
- South Korea considers rules requiring EV battery supplier disclosure, reflecting global trends.
Shares of Hyundai (HYUD.L) fell slightly on Tuesday after the automaker announced a voluntary recall of 37,690 electric vehicles over a battery management system (BMS) software issue that could hinder early fire detection. Kia, Hyundai’s affiliate, is also recalling 1,590 units of its Niro EV for the same software problem. In total, the recall affects 39,280 electric vehicles, according to South Korea’s transport ministry.
Investors responded cautiously, concerned about the impact of recurring battery issues on Hyundai’s EV reputation and sales, especially amid heightened public attention to EV fire risks.
BMS Software Glitch Sparks Safety Concerns
The recall affects four Hyundai models, including the Kona Electric, due to a flaw in the battery management system. The software issue could delay the detection of overheating, increasing fire risk. While Hyundai and Kia emphasize that the recall is voluntary, the move is intended to proactively safeguard drivers and reduce potential hazards.
South Korean authorities have signaled growing concern about EV battery safety, and the government is reportedly considering regulations requiring automakers to disclose all battery manufacturers for vehicles sold in the country.
Following the Kona Electric Crisis
This software recall is closely tied to Hyundai’s earlier Kona Electric battery crisis. In 2023, Hyundai recalled 82,000 Kona Electric vehicles worldwide to replace full battery packs after a fire occurred in South Korea following a previous BMS software update. That recall cost the automaker approximately $900 million, highlighting the potential financial and reputational risks of EV battery failures.
Although the current recall is primarily software-based and less costly than full hardware replacements, it reinforces ongoing concerns about EV battery safety and quality control. Analysts note that repeated safety issues could influence consumer confidence in Hyundai’s electric vehicle lineup.
Global Push for Battery Transparency
Hyundai and Kia have begun listing battery suppliers, including LG, SK On, and occasionally CATL, on their Korean websites in response to public demand for transparency. Europe is also set to mandate full battery supplier disclosure starting in 2026, reflecting a broader international trend toward stricter safety and transparency standards.
Hyundai Mobis, the automaker’s parts affiliate, is developing an advanced automatic fire-suppression system. This system targets individual battery cells to prevent thermal runaway, a chain reaction where overheating cells trigger additional heat buildup, potentially leading to fires. Experts suggest such innovations are key to restoring consumer confidence in EVs.
Market Reaction and Outlook
Hyundai shares dipped modestly following the recall announcement, signaling cautious investor sentiment. While the financial impact of this recall is expected to be smaller than previous Kona battery replacements, analysts emphasize that repeated EV safety issues could affect the brand’s long-term adoption and market perception.
For now, Hyundai stresses proactive safety measures and transparency, aiming to prevent fires before they occur and maintain public trust in its EV models.
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