Shares were down nearly 4% post the earnings, marking the biggest decline on an intraday basis since December 20.
09 Jan 2025 | 1395 Views | By Autocar Professional Bureau
LG Energy Solution posted an unexpected loss on the back of slack in demand for EVs that affected sales, resulting in a fall in the stock, Bloomberg noted. The South Korean battery maker posted an operating loss of 225.5 billion won for the three month period ended December, as per preliminary ...
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LG Energy Solution posted an unexpected loss on the back of slack in demand for EVs that affected sales, resulting in a fall in the stock, Bloomberg noted. The South Korean battery maker posted an operating loss of 225.5 billion won for the three month period ended December, as per preliminary results that came out on Thursday.
Sales were down 19% from a year ago period to 6.45 trillion won, the newswire stated. Shares were down nearly 4% post the earnings, marking the biggest decline on an intraday basis since December 20, the newswire stated.
General Motors which is a big customer of LG, is closing its self driving business Cruise. BMW and Mercedes are rejigging their leadership teams on the back of increasing competition with China and tepid sales for electric vehicles, the newswire noted.
American auto makers seem to have adjusted inventories of EVs and slashed orders for batteries, as per a note by Shinyoung Securities Co. on January 7.
NH Investment & Securities stated that battery demand will be lower than expected.
LG held an 11.2% share of the global EV battery market in the third quarter, whereas China’s Contemporary Amperex Technology Co. Ltd. and BYD Co. held about 52% between them, as per SNE Research, the newswire noted.
Chinese firms are increasing their presence as heir iron-based LFP cells replace nickel-based NCM batteries, which LG has a specialty in, SNE noted.
Korean battery firms which aim to invest a minimum of USD 54 billion in the US, are concerned about incoming President Donald Trump's plan to wind back EV initiatives, and are also apprehensive about the US-China tech war after China announced tougher scrutiny over exports of battery technology, which may disrupt global EV supply chains, the newswire noted.
LG Energy faces “a very challenging business environment” this year, Chief Executive Officer Kim Dong-Myung said in his New Year statement, adding the EV industry will rebound after 2026. The firm will announce its final earnings on January 24.