Bite the bullet, GM: Replace Bolt batteries with Ultiums

Thirty years ago, just as General Motors' Saturn division was launching, 1,836 cars left the plant in Spring Hill, Tenn., with improperly mixed engine coolant. Saturn officials were not sure how extensive the damage to the lost-foam cast aluminum engine would be.

So GM did a very un-GM thing: It sent overnight letters to each customer telling them it was replacing their car with a brand-new duplicate at no cost. Despite what must have been a cacophony of protests from the accountants, GM leadership realized the price of not taking care of the customer could be even bigger if Saturn flopped.

Today, with the Chevrolet Bolt battery fire situation, GM is facing a crisis that is far larger and potentially far more financially dangerous than the one that threatened Saturn. GM leadership has essentially bet the company on a pivot to electric vehicles. This summer, GM upped its investment in EVs and automated driving by 30 percent to $35 billion from 2020 through 2025. GM aims to be all-electric by 2035.

Key battery-powered vehicles such as the Cadillac Lyriq and GMC Hummer EV pickup are now just months away from launch. If the Bolt situation is not addressed quickly and aggressively, consumers may very well stay away from GM's EVs in droves.

The only problem with the Bolt is manufacturing defects in the batteries. The electric powertrain and power electronics are not an issue.

GM's next-generation EVs will come with the company's new advanced Ultium batteries. What to do here is clear: GM should replace the recalled Bolts' batteries with Ultium batteries.

History once again points the way. Twenty years ago, GM notified EV1 drivers that they could have the lead-acid batteries in their cars replaced with newer, better, longer-range nickel-metal hydride batteries. Around 200 of them accepted the offer.

The Bolt recall is big, more than 110,000 cars just in the U.S. It's going to be expensive — GM has estimated it will cost about $1.8 billion. To upgrade the Bolt's battery pack to Ultium cells would likely take some reengineering and new software, at the least.

But the Bolt's driving range would likely increase because Ultium cells have about 60 percent more energy density than the vehicle's current batteries.

The amount of goodwill Saturn generated by replacing those faulty cars helped cement the brand's early success. Just three years after those 1,836 cars were replaced, Saturn sold nearly 300,000 vehicles.

During her successful tenure, CEO Mary Barra has focused relentlessly on profits. GM aims to sell 1 million EVs annually by 2025 and said its first generation of a full EV portfolio will be profitable.

The automaker has the battery technology in Ultium to essentially replicate the success it had with the Saturn recall. It might cost a fortune to do it. But considering what's on the line if consumers don't trust GM's electric vehicles, it could be billions well spent.