LG Energy Solution (LGES), a South Korean battery manufacturer, anticipates a deceleration in the worldwide electric vehicle (EV) industry in the upcoming year. During the last quarter of October to December, the company, which supplies batteries to Tesla, General Motors, Volkswagen, and various other automakers, disclosed an operating profit of 338 billion won (2 million), demonstrating a growth from 237 billion won recorded in the previous year.

LG Energy Solution Predicts Slow Growth in Global EV Market

Reports provided details about this news. In a statement, LG Energy Solution (LGES) has forecasted a temporary deceleration in the growth of global EV battery demand. This anticipated slowdown is attributed to the conservative inventory management practices of original equipment manufacturers (OEMs) and the persistent decline in metal prices. The term "OEMs" pertains to automakers.

According to LGES, this year's potential risk factors encompass the varying pace of EV transition plans by automakers, heightened competition in the European market, and political uncertainties such as the U.S. presidential election.

Additionally, the report also shared Hyundai Motor Co also expressed a reduced interest in the electric vehicle (EV) market. LG Energy Solution (LGES) predicts that the global EV market will grow by about 20% this year, factoring in various considerations, including an expected growth rate of low to mid-30% in the North American market.

LGES aims for mid-single-digit revenue growth this year and plans to maintain capital expenditure at a level similar to last year's 10.9 trillion won. Furthermore, LGES anticipates a significant increase in eligible battery production capacity for U.S. Inflation Reduction Act tax credits, reaching approximately 45-50 gigawatt hours (GWh), more than double the previous year's capacity.

An article in EconoTimes reported that LG Energy Solution's market forecast aligns with the cautionary remarks made by major automakers. Tesla recently warned of a significant slowdown in car sales growth for the year, and Hyundai Motor Co has also expressed concerns about the EV market's slowing sentiment.

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These statements from industry leaders indicate potential challenges for LGES and the broader EV industry. LGES is targeting mid-single-digit revenue growth for the current year, and its capital expenditure is expected to remain at a similar level to the previous year, at 10.9 trillion won.

Notably, LGES anticipates a substantial increase in battery production capacity eligible for U.S. Inflation Reduction Act tax credits. This year's capacity is projected to reach 45-50 gigawatt hours (GWh), marking a significant rise compared to the previous year.

About LG Energy Solution (LGES)

As per its website, LG Energy Solution (LGES) offers a range of energy solutions aimed at improving the world. The company intends to establish innovative and distinctive value propositions as part of its commitment to creating a better future.

Additionally, LGES states that it is leading the way in the energy sector's future by advancing important businesses including Advanced Automotive Battery, Mobility & IT Battery, and ESS Battery-all of which are essential in helping the industry make the switch to green energy.

Among its milestones is being the premier supplier in the electric vehicle, electric ships, drones, and battery-powered spacesuits.

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