In 2021, a total of 31,963 BAIC vehicles were recalled due to the risk of defects and fire hazards from frequent rapid charging in high temperatures. The recall cost was fully borne by the company after acknowledging the defects in the Farasis battery system installed in these vehicles.
An incident of fire in an underground parking lot of an apartment building in Incheon on January 1st was linked to the Chinese-made battery in the Mercedes-Benz EQE electric car. BAIC, a Chinese state-owned automaker, initiated the recall of over 30,000 vehicles equipped with the Farasis battery due to potential fire hazards and product defects.
The Farasis NCM battery system, used in the Mercedes EQE, has been a subject of controversy in China for its quality and safety concerns. Despite Farasis denying any connection to the recall incident, they covered the recall costs, ranging from approximately 30 to 50 million yuan, incurred during the recall process.
It is worth noting that Farasis, founded in 2009 in Zhangjiagang, China, saw a significant decline in revenue contribution from BAIC, its biggest customer, following the recall incident with BAIC’s share plummeting from around 87.6% to 0.14% in 2020. Despite being among the top ten battery suppliers globally with a revenue of $2.32 billion and a production capacity of 15GWh in 2020, Farasis faced challenges after the recall incident.
Mercedes-Benz, on the other hand, has diversified its battery suppliers and also included batteries from Chinese company CATL in their EQE model. Mercedes-Benz did not disclose its battery suppliers due to internal policy constraints.
[Source: News article translations and summaries from Korean news website]