Battery Maker LG Energy Profit Declines as Global EV Sales Slump

The global slowdown in electric vehicle sales has hit LG Energy Solution Ltd., with the Korean battery maker’s third-quarter profit falling almost 40%.

(Bloomberg) — The global slowdown in electric vehicle sales has hit LG Energy Solution Ltd., with the Korean battery maker’s third-quarter profit falling almost 40%.

Operating profit for three months ended Sept. 30 was 448.3 billion won ($332 million), according to preliminary results released Tuesday. While that was higher than analyst estimates of 428.5 billion won, it was down 39% from a year earlier, according to data compiled by Bloomberg. 

Excluding tax credits from the US Inflation Reduction Act, LG made a 17.7 billion won operating loss. Revenue dropped 16.4% to 6.9 trillion won. 

To reduce its reliance on the EV market, LG Energy said Monday it plans to more than double sales by 2028 by expanding businesses such as energy storage systems.

The supplier to carmakers including Tesla Inc. and General Motors Co. has been facing challenges from declining EV sales and lower lithium prices, which are tied to its selling prices. Automakers have also pressured battery suppliers to reduce cell costs in an effort to lower EV prices as high interest rates dampen demand.  

LG Energy said it will announce final results Oct. 28. The stock rose 27% during the third quarter, snapping five straight quarterly declines. LG Energy was up 3.8% in Seoul trading Tuesday following the release of its preliminary results. 

There’s an increased possibility of reduced deliveries to Ultium Cells, a joint venture between LG and GM, as well as tax credits from the IRA, Lee Yongwook, an analyst at Hanwha Investment & Securities Co., wrote in a note dated Oct. 4. GM’s cumulative EV sales this year reached just over 70,000, falling short of its annual production target of all-electric vehicles with its Ultium battery packs. 

“There is limited scope for meaningful earnings recovery for LG Energy Solution for the rest of this year,” Lee said. “However, growth expectations for 2025 still remain valid, driven by new EV models and regulatory changes from the US and Europe.” 

—With assistance from Shinhye Kang.