LG Energy Solution Faces EV Market Slowdown in Q2 2024

Seoul, South Korea - South Korean battery maker LG Energy Solution (373220. KS) reported a 57.6% drop in second-quarter operating profit, as slower electric vehicle (EV) demand and falling metal prices impacted sales.

The company posted an operating profit of KRW 195.3 billion(US$141 million) for the April-June period, down from KRW 460.2 billion(US$333 million) a year earlier.

Revenue fell 29.8% to KRW 6.1619 trillion(US$4.45 billion).

Despite the decline in profit, LG Energy Solution saw a 24.2% increase in operating profit compared to the previous quarter, boosted by U.S. Inflation Reduction Act (IRA) tax credits.

"EV demand slowdown and the impact of declining metal prices on average selling price (ASP) continued through this quarter,"

Said Lee, Chang Sil · Executive Vice President, CFO & CSO of LG Energy Solution.

The company lowered its annual revenue guidance and now expects a more than 20% decrease from last year.

It also reduced its forecast for IRA tax credit-eligible capacity from 45-50 GWh to 30-35 GWh.

LG Energy Solution signed its first large-scale supply agreement for LFP batteries with Renault Group's Ampere and secured a 4.8 GWh ESS supply deal in Arizona.

In response to market uncertainties, the company plans to optimize operations, adjust ramp-up speeds, and focus on improving profitability.