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The Vermont State Police released this photo of the 2019 Chevrolet Bolt EV that caught fire on July 1, 2021 in the driveway of state Rep. Timothy Briglin, a Democrat.
Vermont State Police

Automakers are spending billions of dollars to transition to cleaner and greener battery-powered vehicles, but the new technology has come with an even steeper cost: Reputation-damaging vehicle fires, recalls, sudden power loss and problems getting some of the cars started.

The learning curve with batteries is steep for traditional automakers, and battery technology remains challenging even for Tesla, which has faced similar issues. But automakers are eager to embrace the new technology with President Joe Biden in the White House pushing for half of new car sales to be electric by 2030, a plan that will likely come with billions of dollars in tax and other incentives.

While costly recalls occur in traditional vehicles with internal combustion engines, many of the current trouble spots for electric vehicles are software and batteries – two areas crucial to EVs that are not historically core areas of expertise for Detroit automakers.

“Anytime you go into a new area of technology, there’s more to be learned that there is that you know,” Doug Betts, president of J.D. Power’s automotive division, told CNBC. “There are risks and there are things to be learned.”

The problems are already showing up on corporate balance sheets. Three high-profile automaker recalls within the last year — General Motors, Hyundai Motor and Ford Motor — involving about 132,500 electric vehicles cost a combined $2.2 billion. Most recently, GM said it would spend $800 million on a recall of its Chevrolet Bolt EV following several reported fires due to two “rare manufacturing defects” in the lithium ion battery cells in the vehicle’s battery pack.

Recalls are a common in the automotive industry, especially for new vehicles. It’s one of the reasons vehicles with the newest technologies traditionally perform poorly in some J.D. Power studies.

“When you go from gas to electric, there’s going to be a whole new set of problems you have to deal with, and we just have to figure out how to how to deal with those issues that you know that we haven’t had to deal with in the past,” said Guidehouse Insights principal analyst Sam Abuelsamid.

Recent recalls or problems with batteries or software of new EVs have included:

  • GM last month issued a second recall of its 2017-2019 Chevrolet Bolt EVs after at least two of the electric vehicles that were repaired for a previous problem erupted into flames. The automaker said that officials with GM and LG Energy Solution, which supplies the vehicle’s battery cells, identified a second “rare manufacturing defect” in the EVs that increases the risk of fire. The $800 million recall covers about 69,000 of the cars globally, including nearly 51,000 in the U.S.
  • Porsche recalled the Taycan, its flagship EV, due to a software problem that caused the vehicle to completely lose power while driving.
  • In April, Ford Motor said a “small number” of early customers of its Mustang Mach-E crossover EV reported the 12-volt batteries in their vehicles wouldn’t charge, preventing those cars from operating. Ford said it was due to a software issue.
    In Europe, Ford last year recalled about 20,500 Kuga plug-in hybrid crossovers and suspended sales of the vehicles due to concerns that the battery packs in the vehicles could potentially overheat and cause a vehicle fire. It cost the automaker $400 million.
  • Hyundai Motor earlier this year said it would spend $900 million for a recall following fires in 15 of its Kona EVs.
  • BMW, Volvo and others also have recalled EVs, including plug-in hybrid models, due to issues with battery systems.

Betts, whose career has included turns at Toyota, Fiat Chrysler and Apple, said he believes legacy automakers will figure such problems out as they release more electric vehicles. He said it’s just a matter of time.

“I wouldn’t say that the traditional OEMs have had more or less trouble than Tesla,” he said. “There have been fires with Teslas, too. Obviously, they have a lot more experience now.”

Tesla

While Tesla has avoided massive recalls of its EVs due to battery issues, litigation and investigations by federal officials in the U.S. and Norway could spell trouble for the company.

The National Highway Traffic Safety Administration opened an investigation in October 2019 into Tesla’s high-voltage batteries.

This Tesla Model S Plaid caught fire while the driver was at the wheel, according to a local fire department chief and attorneys representing the driver, on June 29, 2021, in Haverford, Pennsylvania
Provided by Geragos & Geragos

The probe was opened after NHTSA’s Office of Defects Investigation received a petition alleging that Tesla rolled out one or more software updates to control and conceal a potential defect that could result in non-crash fires in affected battery packs.

California-based attorney Edward Chen, who submitted the petition, also filed a class action complaint for the issue against Tesla in August 2019. While Tesla recently agreed to pay $1.5 million to settle the lawsuit, NHTSA’s investigation remains open.

After the settlement, CEO Elon Musk said on Twitter: “If we are wrong, we are wrong. In this case, we were.”

Another proposed class action lawsuit in California, Fish v. Tesla Inc., alleges that Tesla knowingly over stated the capacity of the high-voltage batteries in its cars, and has used remote “battery health checks,” and software updates to conceal battery degradation, and deny owners battery replacements to which they were entitled under warranty.

The complaint says the lead plaintiff’s 2014 Tesla Model S lost more than half of its range over just six years, dropping to the equivalent of 144-mile range on a full charge from a 265-mile range when he first bought it.

The battery complaints in the U.S. were similar to one in Norway in which more than 30 Tesla drivers told the courts that a 2019 software update slashed their Teslas’ battery life, decreased the range and lengthened the time the cars took to charge, according to Norwegian newspaper Nettavisen.

The court preliminarily sided with the owners and told Tesla it may have to pay customers affected by the battery throttling software up to $16,000 each, which could amount to a $163 million payout.

In April, Tesla CEO Elon Musk during an earnings call said there had been “more challenges than expected” in developing new versions of the Tesla Model S and X – the company’s more expensive vehicles. That included the recently released Model S Plaid and “quite a bit of development to ensure that the battery of the new S/X is safe.”

Tesla did not respond for comment on the federal inquires or allegations. The company is not yet delivering the updated version of its luxury SUV, the Model X and has delayed deliveries of many customers’ Model S vehicles this year.

Fires

Vehicle fires are common, generally. According to the National Fire Protection Association, there were 212,500 vehicle fires that caused 560 civilian deaths, 1,500 civilian injuries and $1.9 billion in direct property damage in the U.S. in 2018.

Most of those fires did not involve EVs, which still only make up about 2% to 3% of new vehicle sales in the U.S. annually. However, automakers and their battery cell suppliers are going to have to be extremely careful in the manufacturing of battery electric vehicles and their parts.

“The manufacturing processes are really going to have to be tightened up,” Abuelsamid said. “It’s part of dealing with the way batteries behave. They don’t like heat and they don’t like contamination. They’re very sensitive.”

Something as small as an errant spark from welding or another process can cause a serious problem in battery cells.

Experts are still trying to determine EV fire incident rates; the data is hard to collect from disparate fire departments. Fleet Auto News previously reported on London Fire Brigade records that suggest, based on a small local sampling, “an incident rate of 0.04% for petrol and diesel car fires, while the rate for plug-in vehicle [sic] is more than double at 0.1%.”

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Why a landmark ruling from the world’s top court puts financial markets on notice

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Why a landmark ruling from the world’s top court puts financial markets on notice

Vanuatu’s Climate Change Minister Ralph Regenvanu (C) delivers a speech as he attends a demonstration ahead of the International Court of Justice (ICJ) session tasked with issuing the first Advisory Opinion (AO) on States’ legal obligations to address climate change, in The Hague on July 23, 2025.

John Thys | Afp | Getty Images

Gripped by corporate earnings season and U.S. President Donald Trump‘s back-and-forth tariff policy, investors largely shrugged off a historic climate ruling from the world’s top court.

But for some, the International Court of Justice’s (ICJ) recent advisory opinion on state’s legal obligations in the face of climate change could emerge as a watershed moment for financial markets.

Günther Thallinger, a board member at Allianz, one of the world’s biggest insurers, said that close watchers of the ICJ’s July 23 ruling described it as perhaps the most significant climate development since the 2015 Paris Agreement.

At the time, the pronouncement marked the ICJ’s first-ever opinion on climate change and laid out that climate action is not optional.

The court said in a unanimous ruling that governments and countries have a legal obligation to protect the environment from greenhouse gas emissions, protect present and future generations from the climate crisis and to cooperate internationally.

Notably, the ICJ also found that fossil fuel production, including licensing and subsidies, “may constitute an internationally wrongful act which is attributable to that State.”

This opinion for investors, for capital market participants, really means something.

Günther Thallinger

Board member at Allianz

The ruling, which was the brainchild of young law students in low-lying Pacific island states and championed by the government of Vanuatu, is widely expected to have far-reaching legal and political consequences.

Speaking in a personal capacity, Thallinger said that while the ICJ’s opinion is based on existing law and conventions, the ruling could yet have meaningful ramifications for a vast range of assets — whether one cares about climate change or not.

“If one takes as an investor what the International Court of Justice just said, then a revaluation of these assets needs to happen. Every prudent investor must do this now,” Thallinger told CNBC by video call.

“Even if they don’t like the discussion around climate change, even if they would say they denigrate the Court of Justice completely, they must expect that, in some countries, some governments, some courts are going to follow this opinion,” Thallinger said.

“If they follow this opinion, it has asset valuation implications, quite clearly. So, this opinion for investors, for capital market participants, really means something.”

Licensing and subsidies

On the issue of licensing and subsidies, Thallinger said the ICJ’s ruling could prove to be a significant development.

That’s because licensing and permitting for the mining sector, for example, and government subsidies for fossil fuels could be at risk following the court opinion. The burning of fossil fuels such as coal, oil and gas is the chief driver of the climate crisis.

“If subsides are unlawful, then one should expect that subsidies are somehow stopped at a certain point in time,” Thallinger said.

“Now, certain business processes live on these subsidies or at least benefit to a certain degree on these subsidies. And, as always for an investor, usually you look simply at the cashflow, and if the cashflow part is missing or all of a sudden becomes much smaller then that means another valuation,” he added.

President of the International Court of Justice (ICJ) Yuji Iwasawa (C) and members issue first Advisory Opinion (AO) on States’ legal obligations to address climate change, in The Hague on July 23, 2025.

John Thys | Afp | Getty Images

The U.S. and China, the world’s two biggest carbon emitters, provided a mixed response to the ICJ’s ruling.

“As always, President Trump and the entire administration is committed to putting America first and prioritizing the interests of everyday Americans,” White House spokeswoman Taylor Rogers said in response to the court opinion, Reuters reported.

A spokesperson for China’s Foreign Ministry, meanwhile, said the ruling has a “positive significance” for advancing international climate cooperation and sought to reaffirm the Asian country’s status as a developing country.

Mixed signals

Not everyone is as concerned about the ICJ’s ruling from an investor standpoint.

“I feel like the wide spectrum of views that exist in the investor community on climate change, and the action that investors are supposed to take, will probably mean that the decision is a bit of a Rorschach test,” Lindsey Stewart, director of institutional insights for Morningstar, told CNBC by video call.

“People are just going to see things that kind of confirm their existing view,” he added.

A Rorschach test refers to a psychological assessment during which a person is asked to describe what they see in a series of inkblots.

Ida Kassa Johannesen, head of commercial ESG at Saxo Bank, said the ICJ’s intervention is a non-binding advisory opinion, rather than a ruling, “and this distinction is crucial.”

A firefighter falls on the ground while working to extinguish a wildfire in San Cibrao das Viñas, outside Ourense, northwestern Spain, on August 12, 2025.

Miguel Riopa | Afp | Getty Images

A spokesperson at ABP, one of Europe’s largest pension funds, welcomed what they billed as “the spirit” of the court’s opinion, but said they do not anticipate any short-term ramifications for financial markets.

“The ICJ’s advisory opinion sends a signal that climate inaction may constitute a breach of international law. However, given its non-binding nature, we don’t expect immediate changes in national policies or financial markets,” an ABP spokesperson told CNBC by email.

The Dutch pension fund, which doesn’t invest in fossil fuels and says it actively supports climate solutions, highlighted that Europe, for example, already has a lot of climate legislation in place.

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Global EV sales hit 10.7M in 2025 – Europe surges, US stalls

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Global EV sales hit 10.7M in 2025 – Europe surges, US stalls

Global EV sales are still riding high, with 1.6 million EVs sold in July 2025, according to new data from global research firm Rho Motion. That’s up 21% from July last year, even though sales dipped 9% from June. It brings total EV sales for the first seven months of the year to 10.7 million – up 27% compared to the same period in 2024.

China stays on top

China continues to dominate, with 6.5 million EVs sold year-to-date, accounting for over half of all global EV sales. BEVs are still the top choice, with sales up 40% this year. Plug-in hybrids (PHEVs) didn’t fare as well, with domestic sales down 15% month-over-month and 10% year-over-year.

Even though Chinese EV sales dropped 13% in July from June, EVs made up over 50% of all passenger car sales for the third month in a row. The government is helping keep momentum going with another round of Q3 funding for its EV trade-in scheme, and a final 2025 round is expected in October.

Europe’s EV momentum is speeding up

Europe saw a 30% year-to-date jump in EV sales, reaching 2.3 million units. Germany and the UK are leading the pack – Germany’s up 43%, and the UK is up 32%. But France posted just a 9% year-over-year gain in July and is still down 11% for the year.

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To help turn things around, France is revamping its EV leasing program for low-income households starting September 30, aiming to support more than 50,000 purchases.

Meanwhile, Italy is the dark horse of 2025. Thanks to fresh incentives totaling around $700 million, EV sales are up 40%, and the country is quickly catching up to its neighbors. EV market share in Italy now stands at 11%, compared to 27% in Germany and over 30% in the UK.

North America stalls out except for one short-term boost

North America is lagging, with just a 2% bump in EV sales year-to-date. In the US, that’s partly due to policy uncertainty and tariffs. Automakers took a multi-billion-dollar hit in Q2, although some of that was offset by reduced requirements to buy zero-emission vehicle credits.

A spike in demand is expected in Q3, as buyers rush to take advantage of the Inflation Reduction Act’s EV tax credit before it expires on September 30, but a cooldown is then anticipated.

Some automakers are shifting their EV strategies: Ford recently announced a new “Universal EV Platform” and plans to launch a $30,000 midsize electric pickup with lithium iron phosphate (LFP) batteries by 2027.

And on the trade front, the US has inked deals with South Korea, Japan, and the EU to impose a 15% tariff on imported cars.

The bottom line

Chart: Rho Motion

Global EV sales are still charging ahead, even if the road is bumpy in some regions. China’s holding steady, Europe’s revving up, and North America’s waiting to see what happens next. Rho Motion data manager Charles Lester said, “Despite regional variations, the overall trajectory for EV adoption in 2025 remains strongly upward.”

Read more: EV sales hit 9.1M globally in H1 2025, but the US just hit the brakes


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Volkswagen is making some EV owners pay extra to unlock full potential

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Volkswagen is making some EV owners pay extra to unlock full potential

Another monthly subscription? Some Volkswagen EV drivers will now need to pay extra to unlock their vehicle’s full potential.

Volkswagen has put performance behind a paywall, at least for ID.3 drivers in the UK. The Volkswagen ID.3 Pro and Pro S are now listed with 201 hp on the UK website.

To unlock the vehicle’s full performance of 228 hp, drivers will now need to pay extra. You can choose from a monthly subscription, starting at £16.50 ($22) per month, or you can opt for a one-time lifetime fee of £649 ($880).

However, the one-time fee is attached to the vehicle, not the buyer. So if it’s sold, the upgrade goes with it. As Auto Express pointed out, the monthly payment is nearly three times that of a standard Netflix membership.

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Although the performance upgrade locks the extra power behind a paywall, Volkswagen said it doesn’t affect range.

Volkswagen-EV-pay-extra
Volkswagen ID.3 (left) and ID.4 (right)

Volkswagen isn’t the first, and likely not the last, to make drivers pay for their vehicles’ full potential. Remember when BMW tried to charge $18 a month for heated seats and other features in 2022?

Yeah, that didn’t go over so well. BMW has since dropped the subscription. Other brands, including Polestar, offer similar performance upgrades.

Volkswagen-EV-pay-extra
Volkswagen ID.3 GTX (Source: Volkswagen)

Will Volkswagen try to charge EV drivers in the US or other parts of Europe extra for performance? Given the backlash from BMW, it’s not likely. We’ll see how it goes over in the UK first.

The company is gearing up to launch a new series of entry-level EVs, starting with the ID.2 next year. An SUV version of the ID.2 is scheduled to launch shortly after, followed by the production version of the ID.1, which is set to arrive in 2027. Volkswagen is also considering a “mini Buzz” that could replace the Touran, but nothing has been confirmed.

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