EV Demand Falls Short of LG’s Expectations

TL/DR –

LG Energy Solution’s Q4 ended with slower than expected results due to weaker EV demand. The company’s operating profits rose by 42% year-over-year to $258 million, which was significantly lower than the predicted $464.1 million, and revenue declined by 6.3%. Despite the disappointing results, LG continues its $1.7 billion expansion in Holland, Michigan, and plans to create 1,000 skilled jobs in the region by 2025.

LG Energy Solution’s Q4 Performance and Future Plans amidst EV’s Weaker Demand

Michigan-based LG Energy Solution experienced a weaker Q4 due to a slower-than-expected EV demand. The scenario is further complicated by potential drops in lithium prices, as reported by Bloomberg.

Operating profits in Q4 surged 42% YoY to $258 million, considerably lower than the anticipated $464.1 million. Concurrently, revenue fell by 6.3%. LG’s earnings included a significant tax credit of about $191 million from President Biden’s Inflation Reduction Act, leaving the company’s operating profit at just $67.2 million without it.

Despite the challenging Q4, LG is in the middle of a $1.7 billion expansion in Holland, Michigan, and preparing for a $3 billion partnership with Toyota for a separate 53,000-square-foot space. As part of the expansion, the company has acquired six properties north of its current facilities, including Holland’s oldest surviving home, the Old Wing Mission.

However, LG’s expansion transition and the EV sector’s realignment have led to the layoff of 170 production team members in Holland, according to LG President of Michigan Charles Hyun.

Despite the layoffs, LG plans to create 1,000 high-paying jobs in the region by 2025. However, Bloomberg predicts a further drop in LG’s sales in 2024 following announcements that GM and Ford Motor Co. intend to use iron-based batteries instead of LG’s nickel-based batteries.Subscribe for more local news and unlimited access to our coverage.

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