South Korean battery company LG Energy Solutions (LGES) announced on Thursday that its quarterly profit fell by 58%, primarily due to weak demand for electric vehicles (EVs).
The company, which supplies batteries to Tesla, General Motors, Hyundai, and other automakers, reported an operating profit of 195 billion won (approximately $141 million) for the April to June period, in line with previous forecasts.
This result represents a significant drop from the 461 billion won profit recorded during the same period last year.
LGES stated in regulatory filings that without the tax credits received under the U.S. Inflation Reduction Act, the quarter would have resulted in an operating loss of 253 billion won.
Revenue for the quarter fell by 30% to 6.2 trillion won.
LGES mentioned that due to the slower-than-expected growth of the electric vehicle market, it has adjusted its full-year revenue target to decline by over 20%. Previously, the target was to achieve mid-single-digit percentage growth compared to 2023.
LGES shares fell by 2.6% in early trading, while the benchmark KOSPI index fell by 1.6%, marking the lowest price since its listing in January 2022. This decline follows the fall in Wall Street stocks, with Tesla shares dropping 12% due to disappointing quarterly results.
