LG Energy Solution hints at first-quarter operating loss due to weak EV demand
LGES, which supplies to Tesla, General Motors and Hyundai Motor, among others, is struggling with weak EV battery demand, with one of its major customers, GM, being idling a Detroit EV plant until April.
GM is one of its major customers and recently temporarily closed the Detroit plant.
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Nextstar’s South Korean parent company signals first-quarter operating loss due to weak EV demand
South Korean battery maker LG Energy Solution (LGES) said on Tuesday it expects an operating loss of 208 billion won in the first quarter. won (about $192 million Cdn), as weak demand from electric vehicle (EV) makers weighed on earnings.
This compared to the LSEG SmartEstimate forecast of $160 billion. won The loss, which is passed on to analysts who are consistently more accurate.
Here are some details:
- Revenue will likely fall 2.5 percent to ₹6.6 trillion won From a year ago, LGES said.
- LGES said in a regulatory filing that the quarterly earnings guidance includes tax credits provided under the US Inflation Reduction Act for the company’s battery production in the United States. Excluding credits, LGES would have recorded an operating loss of ¥398 billionwon.
- In February, LGES said it aimed to triple its ESS revenue this year from a year earlier. Nomura estimated the company’s ESS revenue at approximately $2.8 trillion won In 2025.
- Analysts also said that the US House bill, the charging actA ban on imports of some Chinese-made energy storage systems was introduced last month, which could create opportunities for South Korean battery makers. The bill cites concerns that energy storage systems manufactured in China and imported into the United States could include remote monitoring capabilities.
LGES is the parent company of Nextstar Energy in Windsor, Ontario. Vishal Battery Cell Factory It was initially created to serve the electric vehicle battery market, however, its focus has now shifted to energy storage systems Due to decline in EV market. The plant has the flexibility to produce batteries for both regions going forward.
The provincial and federal governments have Promised to give subsidy up to 16 billion dollars To Nextstar. it was originally a Joint venture between automaker Stellantis and LG Energy Solution.
LGES is set to report detailed earnings on April 30.
With files from Heekyong Yang and CBC News
