Latest news with #KangDong-jin
Reuters
5 days ago
- Automotive
- Reuters
LG Energy Solution warns of slowing EV battery demand due to U.S. tariffs, policy headwinds
SEOUL, July 25 (Reuters) - South Korean battery firm LG Energy Solution ( opens new tab warned on Friday of a further slowdown in demand by early next year due to U.S. tariffs and policy uncertainties after it posted a quarterly profit jump. 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)
CNA
5 days ago
- Automotive
- CNA
LG Energy Solution warns of slowing EV battery demand due to US tariffs, policy headwinds
SEOUL :South Korean battery firm LG Energy Solution warned on Friday of a further slowdown in demand by early next year due to U.S. tariffs and policy uncertainties after it posted a quarterly profit jump. Its major customers Tesla and General Motors 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 per cent after the earnings announcement in morning trade, versus benchmark KOSPI's 0.3 per cent rise.
Korea Herald
23-04-2025
- Business
- Korea Herald
With new US duties on solar imports, Hanwha, OCI eye bigger market share
Korean energy companies, namely Hanwha Qcells and OCI Holdings, are expected to benefit from the United States' decision to impose tariffs of up to 3,500 percent on solar energy imports from Southeast Asia. Earlier this week, the US Department of Commerce released the final tariff amounts planned for solar cells from Cambodia, Malaysia, Thailand and Vietnam. The antidumping and countervailing duties seek to protect American solar panel manufacturing. The decision came after the American Alliance for Solar Manufacturing Trade Committee, which includes Hanwha Qcells, a solar energy unit under Korea's Hanwha Solution, Arizona-based First Solar, and other smaller energy companies, filed a petition in April last year, prompting the US authorities to begin the investigation. The group claimed that Chinese companies were producing solar products in Southeast Asia to avoid paying tariffs on their exports, and were subsidized by the governments of the four aforementioned countries. These products would then be "dumped" into the US market at low prices that other solar panel manufacturers could not compete with. As the announcement of the tariffs on Cambodia, Malaysia, Thailand and Vietnam puts pressure on China's major solar panel producers, the US solar panel supply chain will be rearranged with Korean companies becoming key players, Kang Dong-jin, an analyst at Hyundai Motor Securities, said in a report on Wednesday. 'The antidumping and countervailing duties will be added to (the US') reciprocal tariffs and (the four countries) will weaken in terms of their competitiveness in American exports,' said Kang. 'Aside from these four countries, other nations will also find it difficult to export solar cells and modules to the US.' The analyst selected Hanwha Solution as the most preferred stock in the solar energy industry as the Korean company is setting up what it calls 'Solar Hub,' a 3 trillion won ($2.1 billion) investment to establish a complete solar panel production chain in the state of Georgia. Once the Solar Hub project is completed by year-end, Hanwha will secure an annual production capacity of 8.4 gigawatts and ramp up its US production portion to 70 percent. Kang also pinpointed OCI Holdings as a stock to keep an eye on. The Korean company is investing $265 million to build solar cell production plant in Texas. OCI Holdings plans to begin commercial production of 1 GW solar cells in the first half of next year and gradually increase the capacity later to eventually reach 2 GW. 'Hanwha Qcells had been suffering due to dumped and subsidized solar panel imports from Southeast Asian countries despite investing heavily in its US production,' said an official working in the solar energy sector. 'The tariffs will give the Korean companies fair competition in the US market.' The tariffs on the Southeast Asian countries will go into effect after and if the US International Trade Commission makes a final ruling by June 2 that the American solar panel industry was harmed due to the imports from those nations.
