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LG Energy Solution Warns of Slowdown Amid US Tariffs and Policy Uncertainties
25 Jul
Summary
- LG Energy Solution's Q2 profit more than doubled
- Demand surge due to customers stockpiling ahead of potential US tariffs
- Warns of slowdown in demand due to US tariffs and policy uncertainties
In the recent past, South Korean battery firm LG Energy Solution (LGES) has experienced a significant jump in its quarterly profits. The company, which supplies batteries to major automakers like Tesla, General Motors, and Volkswagen, reported an operating profit of 492 billion won ($358.73 million) for the April-June period, more than double the 195 billion won profit it posted a year earlier.
However, LGES has now warned of a slowdown in demand due to US tariffs and policy uncertainties. The company says that the surge in profits was partly driven by front-loaded demand, as some customers stockpiled batteries ahead of potential US tariffs. Now, LGES and its customers are bracing for further fallout from the tariffs and an additional slowdown in demand for electric vehicles.
The United States recently passed legislation to end federal subsidies for EV purchases, which is expected to further impact the market. LGES has stated that it would have made a 1.4 billion won operating profit excluding a tax credit it received under the US Inflation Reduction Act.
