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LG Energy Solution to cut additional costs to ride out EV sale lull

Published: 02 Jan. 2025, 18:38

LG Energy Solution's battery manufacturing plant in Poland [LG ENERGY SOLUTION]

LG Energy Solution, Korea's leading battery maker, said Thursday it will readjust planned investments and cut additional costs to ride out a prolonged slowdown in electric vehicle sales.

In his New Year's message to employees, LG Energy Solution Chief Executive Kim Dong-myung said the company will take measures to survive the "challenging situation it has never experienced before" in the EV market. He offered no further details.

In recent years, challenges from smaller Chinese rivals and their cost competitiveness have emerged as a major threat to Korean car battery makers.

Moreover, high EV battery prices, short driving range, lack of charging infrastructure and concerns over lithium-ion battery fires have added to the woes facing battery firms.

The CEO expected EV sales to recover after 2026 once market concerns over such factors are eased or resolved.

LG Energy's net profit nearly halved to 749.62 billion won ($511 million) in the January-September period from 1.44 trillion won a year earlier.

To offset lower battery demand, the company said it will expand its non-EV businesses, such as energy storage systems (ESS), and develop next-generation battery technology, including all-solid-state and dry electrode processes.

The LG affiliate said it will change some of the battery production lines in its global plants for the production of ESS, whose demand is on the rise.

In North America, LG Energy Solution currently operates three battery cell plants — the first and second plants under a joint venture with General Motors, and the third in Holland, Michigan. Additional plants are being constructed in the U.S. states of Michigan, Georgia and Ohio, as well as Ontario, Canada, under joint ventures with GM, Hyundai Motor Group, Honda Motor and Stellantis, respectively.

The company also has plants in Korea, Poland, China and Indonesia.

Yonhap