LG Energy saw profits drop in Q3 of 2024 as demand for electric vehicles (EV) slows. The company’s figures for September 2024 exceeded analysts’ expectations but were 40 per cent lower than September 2023.
The company recorded a profit of 448.3 billion KRW (494 million AUD) in late 2024. LG Energy is currently the battery supplier for Tesla, General Motors, and Hyundai Motors’ batteries.
MOVING FORWARD
Lee Chang Sil, LG Energy’s Chief Financial Officer, foresees an arduous fourth quarter this 2024. “Looking ahead to 2025, we see continuing macro uncertainty and geopolitical risk, increased battery exports by Chinese rivals, as well as (automaker) customer plans to manufacture their own batteries, which would intensify competition,” said the CFO.
As early as 2024, LG Energy planned to reduce its costs for the following year. Using this “conservative” approach, the company seeks to base its 2025 onlook on necessary investments.
Due to the worldwide slowdown of EV demand, other EV manufacturers are also forced to cut down on their operations. Though this is the case, intensive competition from Chinese EV and battery manufacturers add to the challenge.
EV manufacturers are looking to the results of the US President Elections to either improve or deter their future performances. According to analyst Kang Dong Jin, US presidential candidate Donald Trump has vowed to remove President Biden’s tax credits for EVs. “The result of the US presidential election will also have a significant impact on the market, so it’s very difficult to provide an outlook for next year,” said Kang.
Despite this, the company seeks to recoup its losses. BloombergBNN reported that LG is looking to “diversify its business portfolio” and “double sales by 2028.” LGE’s analysts told Reuters that they predicted the company would “recover” in the next year and a half to three years. LG energy remains optimistic that it can boost profits in the next few years.
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