LG Energy Sees Surprise Loss as EV Demand Outlook Cools
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Article content(Bloomberg) — LG Energy Solution Ltd. reported a surprise preliminary operating loss for the fourth quarter, as the slow unraveling of electric vehicle demand in key markets darkens the outlook for South Korea’s largest battery maker. Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentIt had an operating loss of 122 billion won ($83.8 million) in the three months ended Dec. 31, the company said. That missed analyst estimates for a 33.1 billion won profit, though losses shrank from 225.5 billion won in the same period a year earlier.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentWithout the US tax credits for advanced manufacturing, the loss would have been 454.8 billion won. Revenue fell 4.8% to 6.1 trillion won. The company will release final results later this month. Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentLG Energy shares were little changed in Seoul following the results, and have tumbled around 20% in the past month on growing concerns that the world’s transition to EVs is losing steam.Article contentThe upheaval has been particularly acute in the US, where President Donald Trump has scrapped a federal tax credit for EV purchases and plans to significantly weaken fuel efficiency requirements. The financial fallout has ensnared some of the industry’s biggest names, with General Motors Co. warning it will take another $6 billion in charges tied to production cutbacks and Ford Motor Co. announcing $19.5 billion in charges from an overhaul of its EV business.Article contentChallenges are also mounting for battery makers. Ford has scrapped a 9.6 trillion won battery deal with LG and is breaking up a US venture with SK Innovation Co.’s battery unit SK On as it walks back its EV ambitions. Germany’s Freudenberg Battery Power Systems canceled a 3.9 trillion won agreement with LG Energy Solution as it exits the battery business.Article contentArticle contentLG Energy is also selling facilities and other assets from a battery plant it runs jointly with Honda Motor Co. in Ohio to the Japanese carmaker to improve operational efficiency. Article contentBeyond the rollback of policy support for the EV transition, LG Energy faces headwinds from US tariffs and intensifying competition with Chinese rivals. It’s also still seeking to shake off the unprecedented immigration raid in September at the Georgia plant it runs with Hyundai Motor Co., in which hundreds of South Korean workers were detained. Article contentWith the EV outlook deteriorating, LG Energy has been ramping up its energy storage system business and is building two production lines in Arizona and Michigan. Article contentLG Energy Chief Executive Officer Kim Dong Myung said this week that the company will accelerate switching its EV battery production in North America, Europe and China to boost its ESS capacity. It also aims to prioritize using artificial intelligence in product and materials development, as well as manufacturing, with the goal of improving productivity by at least 30% by 2030.Article content“I’m seeking to fully realize the growth potential of our ESS business. Demand for ESS is expanding faster than ever before, and this is a critical opportunity that will determine the success of our portfolio rebalancing,” he said in his New Year message. 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