Profits plummet at battery-maker LG Energy amid EV slowdown

LG Energy supplies batteries to some of the biggest car markers in the world including General Motors and Volkswagen. 

Profits at battery-maker LG Energy Solution slumped as slower growth for electric vehicles hurt shipments and profitability.

The supplier to General Motors, Volkswagen AG, and Tesla among other automakers, reported 157.3bn Korean won (€107m) in operating profit for the first three months of the year, missing analysts’ estimates.

If it wasn’t for a tax credit doled out by US President Joe Biden’s Inflation Reduction Act, LG would have made a 31.6bn won (€21m) operating loss.

The report was preliminary and LG will announce final first-quarter results later this month, likely on April 25.

Earlier this week, Tesla reported quarterly shipments that were much lower than analysts’ estimates and warned its rate of growth will be “notably lower” this year, blaming interest rate hikes, among other things, for consumers’ decreased appetite.

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In February, Renault SA Chief Executive Officer, Luca de Meo, echoed similar sentiments saying this year may be “tricky” for electric vehicles. Sales may recover in 2025, he said.

For the first quarter, LG Energy reported sales of 6.13tn won (€4.1bn), down 30% year-on-year.

The electric car market has seen a notable slowdown in recent months. In Europe, car sales in February rose by 10% but the market share of electric vehicles stayed flat.

Battery-powered cars did not manage to grab more share after demand fell in markets including Germany and Sweden. Some countries are also phasing out state-sponsored electric vehicle incentives that for years bolstered demand.

Bloomberg