SEOUL: South Korean battery manufacturer LG Energy Solution reported a significant jump in second-quarter profits but cautioned about a potential slowdown in electric vehicle (EV) demand due to U.S. tariffs and policy changes.
The company, a key supplier to automakers like Tesla and General Motors, highlighted concerns over the early termination of U.S. federal EV subsidies and rising tariffs. CFO Lee Chang-sil stated,
“U.S. tariffs and an early end to EV subsidies will put a burden on automakers, potentially leading to vehicle price increases and a slowdown in EV growth in North America.”
Despite these challenges, LGES posted an operating profit of 492 billion won ($358.73 million) for April to June, more than double the 195 billion won recorded a year earlier.
The surge was partly attributed to U.S. battery production subsidies and stockpiling by customers ahead of anticipated tariffs.
Excluding tax credits under the U.S. Inflation Reduction Act, the company’s operating profit would have been 1.4 billion won.
To counter weakening EV demand, LGES plans to increase production of batteries for energy storage systems while reducing or delaying some investments.
However, investor sentiment remained cautious, with shares dropping 2.3% following the earnings announcement. - Reuters
