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Pedego recalls 5,000 e-bike batteries

Published February 9, 2015

IRVINE, Calif. (BRAIN) —  Pedego Electric Bikes is voluntarily recalling the batteries from every e-bike it produced between January 2010 and September 2013.

Pedego launched the recall, which involves approximately 5,000 batteries, around the beginning of the year after receiving two complaints from customers whose batteries overheated and melted while charging, said Terry Sherry, the company's co-founder and CFO.

"The first time it's like, what the heck just happened?' Sherry said. "After the second time, you start asking questions and doing the research."

He said the battery issue stemmed from an apparent manufacturing problem. A film corrodes inside the battery cell that serves as a barrier between the anode and cathode, allowing the battery to short and overheat.

"The challenge we have is that we have no way of knowing how many cells have that potential problem. We know it was a small group but we don't know which cells they were," Sherry said. He declined to name the manufacturer, which is based in China.

In September 2013, Pedego decided to begin sourcing all e-bike batteries from Samsung. Pedego has advertised the recall through its website and Facebook page, and through its retailers. It also operates a website, www.batteryrecall2015.com, where consumers can see if their battery is covered by the recall.

The company also has attempted to contact all affected consumers directly.

"We've sent out emails to everybody that we possibly have emails for, or sending out letters to all those that we don't have emails for," Sherry said. "We're very concerned about our customers and their safety and that's paramount to us," he added.

"We made the tough — and costly, I might add — decision to recall 5,000 batteries."

The battery manufacturer is covering some of the costs of the recall, but Sherry said Pedego still expects to take a significant financial hit.

Shipping is big expense. Because batteries are considered hazardous materials, Sherry said Pedego pays a surcharge of $35 to $40 for every battery it ships to a consumer.

"Instead of $20 a battery, it ends up costing me $55 or $60 a battery," he said. "When you're shipping out a thousand of them, two thousand of them, it starts to add up."

Sherry said Pedego assumes consumers have already replaced between 1,500 and 2,000 of the affected batteries through attrition. "As they get older they start losing their energy and they have to be replaced anyway, just like any battery," he said.

He said Pedego customers have responded positively to the recall, and to the company's efforts to replace affected batteries for free. "It's starting to pay back in spades because our customers are our biggest fans," he said. "When do you stuff like this, it just reinforces the reasoning why they should recommend you to their families and friends." 

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