LG Energy Solution warns of slowing EV battery demand due to U.S. tariffs, policy headwinds
Its major customers Tesla TSLA.O and General Motors GM.N warned of fallout from U.S. tariffs and legislation that will end federal subsidies for EV purchases on September 30.
"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," CFO Lee Chang-sil said during a conference call.
However, LGES said it expected to improve profits in the second half by boosting production of batteries for energy storage systems (ESS) to offset the sluggish EV demand, while cutting or delaying investment plans.
LGES is one of the few U.S. producers of LFP batteries, a battery chemistry long dominated by Chinese rivals.
The company said it is considering converting some EV battery production lines in the United States to cater to ESS in response to slowing EV demand.
It started production of LFP batteries at its Michigan factory in May, and aims to increase production capacity of ESS batteries to over 30 gigawatt hours (GWh) by next year, up a projected 17 GWh this year.
"When LGES operates the plant at full capacity, it could generate subsidies for nearly 2 trillion won ($1.5 billion) ... unlike EV batteries, ESS involves selling full systems rather than just battery cells, which drives up average selling prices and margins," said Kang Dong-jin, an analyst at Hyundai Motor Securities.
Kang added that LGES currently stands as the only player in the U.S. market capable of supplying LFP-based ESS, giving it an advantage with virtually no competition.
LGES said its operating profit more than doubled in the second quarter, thanks to U.S. subsidies on battery production and stockpiling by some customers there ahead of potential tariffs.
It reported an operating profit of 492 billion won ($358.73 million) for the April to June period, versus a profit of 195 billion won a year earlier.
LGES would have made a 1.4-billion-won operating profit excluding a tax credit it received under the U.S. Inflation Reduction Act, LGES said in a regulatory filing.
LGES shares were trading down 1.6% after the earnings announcement in morning trade, versus benchmark KOSPI's (.KS11), opens new tab 0.3% rise.
($1 = 1,377.6000 won)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
a minute ago
- Reuters
Rupee slips but sidesteps firmer dollar as flows dominate price-action
MUMBAI, July 28 (Reuters) - The Indian rupee dipped on Monday as month-end dollar bids from importers exerted some pressure, but the currency largely sidestepped the spillover from a firmer dollar, which traders indicated was due to the absence of substantial outflows. The rupee closed at 86.6650 against the U.S. dollar, 0.2% down from its close of 86.5150 in the previous session. While the rupee was trading marginally stronger in the first half of the session, it reversed course in the latter half as the dollar index rose. Asian currencies were a tad lower on the day, with the offshore Chinese yuan down by 0.1%. The rupee is "only reacting to flows" over recent sessions, and has found some support above 86.60, a trader at a state-run bank said, pointing to price action driven by foreign portfolio flows and corporate activity. India's benchmark equity indexes, the BSE Sensex (.BSESN), opens new tab and Nifty 50 (.NSEI), opens new tab fell 0.7% and 0.63% on the day, respectively, diverging from gains in most regional equities. The country's benchmark 10-year bond yield, meanwhile, ticked up to 6.3603%. Equities in Europe were mostly higher while the euro fell, after the U.S. and EU reached a trade agreement over the weekend and investors welcomed the deal with cautious optimism. The euro's recent price action "likely reflects more general U.S. dollar sentiment that was improving toward the end of last week, and we suspect (the sentiment) could extend further this week as investors' optimism over the U.S. economy improves," MUFG said in a note. U.S. economic data, including the closely watched non-farm payrolls report, will be in focus as investors gauge how far the optimism extends. The Federal Reserve, meanwhile, will deliver its policy decision on Wednesday and is widely expected to keep rates unchanged. Interest rate futures are currently pricing in a little over 60% chance of a rate cut in September, per CME's FedWatch tool.
Reuters
2 minutes ago
- Reuters
China's net gold imports via Hong Kong in June fall 60% from May
July 28 (Reuters) - China's net gold imports via Hong Kong in June fell nearly 60% from May, Hong Kong Census and Statistics Department data showed on Monday. As the world's leading gold consumer, China's purchasing activities can influence global gold markets significantly. The Hong Kong data may not provide a complete picture of Chinese purchases because gold is also imported via Shanghai and Beijing. Net imports via Hong Kong to China for June stood at 19.37 metric tons, compared with net imports of 48.13 tons in May. China's total gold imports via Hong Kong reached 34.72 tons in June, down nearly 40% from May's 57.76 tons. China's gold consumption in the first half of 2025 fell 3.5% from the same period a year earlier to 505.2 metric tons, the state-backed gold association said last week. China's imports of gold extended declines for a second successive month in June, customs data showed on July 20.
Scotsman
6 minutes ago
- Scotsman
Mibro GS Explorer S: rugged AMOLED smartwatch with diving mode for £186
The Mibro GS Explorer S is a premium sports watch without the premium price | Mibro This article contains affiliate links. We may earn a small commission on items purchased through this article, but that does not affect our editorial judgement. With a 1500-nit AMOLED display, 10ATM water resistance and 60-day battery claims, this rugged watch is built for anything. Sign up to our daily newsletter Sign up Thank you for signing up! Did you know with a Digital Subscription to Edinburgh News, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... If you're shopping around for a smartwatch that's ready for some tough times in the great outdoors, you might naturally migrate to the bigger brands like Garmin or Suunto. And if you wanted one with an AMOLED screen, Bluetooth calling, military strength testing and a battery that can last for weeks, you know it's going to cost a pretty penny. But is it? A new watch has just been launched by Mibro, a Chinese tech firm, which packs in some seriously impressive features and you can currently buy it for £186. It's the Mibro GS Explorer S, and its features start with the impressive 1500-nit HBD AMOLED display. It's really bright, which is exactly what you need on an outdoor adventure. It's also seriously tough. Mibro put its new flagship watch through 17 military standard tests, which means it can cope with extremes of weather, bashings from rock faces and, obviously, submersion. There's also dual-frequency five-satellite GNSS for location tracking and a 10-axis motion sensing system, which means it's always tracking your precise movements. It feels great on the wrist, with a chunky bezel, but not too much weight | Mibro And then there's the water resistance. Another of the GS Explorer's stand-out features is its free-diving mode. And its water resistance rating is 10ATM, which can withstand depths of up to 100 metres. And, you have to remember, this is a phone with chunky buttons you can operate with gloves on, and Bluetooth calling. Yes, the Bluetooth calling system actually works underwater. The free-diving mode is one of several customisable setups you can flick over to, and it gives you depth and time warnings, current depth indication, and other tailored data. But there are plenty of other modes for other extreme sports, all wrapped up in an intuitive interface called Galaxy OS 2.0. It's eerily similar to Huawei's operating system, as is the companion app. And that's no bad thing. It feels light on the wrist, but incredibly robust. There are absolutely no build-quality qualms here. There's even a premium titanium version, which takes this to the next level. Battery life is also a strength, with claims of up to 60 days in a restrictive mode, 20 days in a daily mode, and around 15 hours with all the sensors on. I found that's all pretty realistic while using the watch out and about. The Bluetooth calling function even works underwater | Mibro The body trackers, which include heart rate and blood-oxygen monitoring, do take their toll when you use the most accurate settings, but it's possible, with a little careful management, to keep the watch going for over a week in normal use, and that's superb. I did experience a few glitches with the tracking and, comparing it with other watches I have at my disposal, some of the data was a little off. But I've always found they need time to settle in. That said, the overall feel was that the Mibro interface needed some finessing, which can doubtless be done through firmware updates, because it occasionally missed the fact I'd gone out on a bike ride, for example, and I missed a few notifications from time to time. Overall though, it's a seriously impressive piece of kit, especially considering it costs less than £200 at the moment. I'd also go as far as to say it's more attractive than the rivals from Garmin and Suunto, and it feels more robust than most of them. I've always been a fan of Chinese smartwatches and, while there are a lot of rubbish examples out there to sift through, every now and again you'll find a gold nugget. And the Mibro GS Explorer S is one of them.
