Written by Joyce Lee and Hyongo Jin
SEL (Reuters) – The South Korean batteries, LG Energy Solution (LGES) said on Friday that it plans to reduce capital spending up to 30 % this year due to the slowdown in the growth of demand for electric cars, after registering a quarterly loss for the first time three years ago. .
The company, which manufactures the batteries for Tesla (NASDAQ :), and the Gres Motors (NYSE 🙂 and Volkswagen (ETR :), an operational loss of 226 billion Won ($ 158 million) from October to December.
This result is compared to profits of 338 billion winners for the same period in the previous year.
US President Donald Trump, who was recently inaugurated, said this week that his administration will consider the end of the $ 7500 tax exemption on electric car purchases. Lages said on Friday that canceling the credits would put down downward pressure on the American market.
“The changes in customs tariffs and American benefits can slow down the pace of electricity in the short term, but we believe that there will be no significant change in the future direction of the batteries industry,” Lee Zhang Cell, financial manager of LG Energy Solution, said at a press conference. Collective call.
General Motors
LGES said its profits for the fourth quarter were affected by the decrease in the demand from General Motors, which produces batteries with LG Energy in North America for General Motors. LGES said that the request is expected to recover from the main agent starting from the second quarter with the launch of new models.
The company also said that it aims to increase its revenues by 5% to 10% this year, through the common batteries factories with Stelantis (NYSE 🙂 and Honda (NYSE 🙂 Production in North America begins in the second half of this year.
LGES said it would focus, as part of spending cuts, on the use of current or previously planned production instead of building new factories in North America.
LGES, which runs joint batteries with General Motors in Ohio and Tennessee, bought a share of General Motors at another batteries factory in Lansing, Michigan, in December.
In a message on the occasion of the new year early this month, Kim Dong Meongy, CEO of LG Energy Solution, said he expected the electric car market to recover after 2026, while also warning of challenges such as the global expansion of Chinese competitors.
The revenues of the past quarter decreased by 19% compared to the previous year to reach 6.45 trillion Won.
LGES shares closed fixed after the results, compared to the standard index by 0.9%.
($ 1 = 1,430.2000 Won)
