(Bloomberg) -- The South Korean units of Mercedes-Benz Group AG and BMW AG disclosed the names of the companies that supply their electric-vehicle batteries for the first time after an EV explosion in the country prompted a nationwide safety investigation.
The German carmakers revealed the battery suppliers for their EV models Tuesday on their websites, after Hyundai Motor Co. and Kia Corp. shared the names of their battery makers in recent days. At a meeting Tuesday, the government said it planned to advise all EV makers to voluntarily disclose the names of battery suppliers, and offer free inspections to owners.
Automakers based in South Korea are preemptively taking action to address the growing fears over EV safety, after an unplugged electric Mercedes-Benz sedan caught fire at an apartment complex in Incheon earlier this month. The incident led to the evacuation of 200 families and triggered calls for tougher government measures on EVs.
The full disclosure of EV battery manufacturers is a rare move by carmakers as the information is typically kept confidential around the globe. While Mercedes did not specify which company made the battery in the car involved in the fire, local media identified it as China’s Farasis Energy. The transport ministry has advised Mercedes to conduct a special inspection of the vehicle in question, reports say.
Mercedes-Benz Korea is offering free inspections for all of its EV models from Wednesday, it said in a statement. Separately, the company announced plans to donate about 4.5 billion won ($3.3 million) to help residents affected by the explosion, even though the investigation into the fire is still underway.
Farasis was ranked 15th among the global battery makers, according to a BloombergNEF estimate of manufacturing capacity between 2023-2025. It began supplying batteries to Mercedes-Benz in 2018 as part of an eight-year contract with the German carmaker becoming a strategic investor in the company in 2020, some of the reports said. Farasis didn’t immediately respond to requests for comment.
“It’s difficult to tell at this point whether Farasis batteries are the problem, but there’s a general sentiment that the risk is higher with smaller battery makers than major producers like CATL or Korean makers,” said Yoon Joonwon, a fund manager at DS Asset Management Co. in Seoul. “Until the issue is resolved, consumer sentiment toward EVs is expected to remain deteriorated for some time.”
The Office for Government Policy Coordination will come up with comprehensive measures in September to address the safety risks of EVs, after having discussions with related ministries and industry experts, it said in a statement.
--With assistance from Shinhye Kang, Seyoon Kim, Jiayan Shi and Chunying Zhang.
(Updates with government response in second and last paragraphs.)
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