LG Energy Solution cuts capex as demand for electric vehicles slows after fourth-quarter loss Reuters

By Joyce Lee and Hyunjoo Jin

SEOUL (Reuters) – South Korean battery maker LG Energy Solution (LGES) said it expects demand growth for electric vehicles to slow in the short term, as it posted a quarterly loss for the first time in three years on Friday.

LG Energy Solution said it plans to cut capital expenditures by up to 30% this year, also warning of slowing growth due to changes in environmental policies in some major markets.

The company, which makes batteries for Tesla (NASDAQ: ), General Motors (NYSE: ) and Hyundai Motor (OTC: ), reported an operating loss of 226 billion won ($158 million) for the October-December period.

The result compares with a profit of 338 billion won in the same period last year.

In a New Year’s message earlier this month, LG Energy Solutions CEO Kim Dong-myung said he expects the electric vehicle market to recover after 2026, while warning of challenges such as the global expansion of Chinese rivals.

US President Donald Trump also said this week that his administration would consider ending tax credits for electric vehicles.

LG Energy Solution said on Friday that the elimination of the US federal tax credit of $7,500 on the purchase of electric vehicles would put pressure on demand for electric vehicles.

Trump’s EV policy is expected to slow the pace of electrification in the U.S. in the short term, LG Energy Solution CFO Lee Chang-sil said during a conference call.

Revenue for the last quarter fell 19% from a year earlier to 6.45 trillion won.

Shares of LGES rose by 0.14% after the announcement of the results, compared to the growth of the benchmark of 0.6%.

($1 = 1430.2000 won)