South Korean battery maker LG New Energy (LGES) predicted on Friday that the growth of the global electric vehicle market will slow this year.
Zhitong Finance learned that South Korean battery manufacturer LG New Energy (LGES) predicted on Friday that the growth of the global electric vehicle market will slow down this year, indicating that the company will face further challenges in the future amid increasingly fierce competition from Chinese competitors. LGES's operating profit for October to December last year was 338 billion won (USD 252 million), an increase of 43% year over year. Analyst forecast data compiled by LSEG SmartTest was 298 billion won. Sales for the fourth quarter were 8.00 trillion won, down 6.3% year on year. Analysts expected 8.35 trillion won.
However, due to weak demand for electric vehicles in Europe, fourth-quarter profits fell by more than half from the previous quarter. Second, net profit fell from 275.6 billion won in the same period last year to 190.3 billion won (about 142 million US dollars), a year-on-year decrease of 31%.
The battery supplier for Tesla (TSLA.US), General Motors (GM.US), Volkswagen, and other car manufacturers reported: “Global EV battery demand growth is expected to slow temporarily due to conservative inventory control by original vehicle manufacturers (OEMs) and the continued decline in metal prices.”
LGES said this year's risk factors will be changes in the pace of automakers' electric vehicle transformation plans, increased competition in Europe, and political uncertainty, including the US presidential election. Ahead of LGES's forecast for this year's market outlook, its automaker customer Tesla warned on Wednesday that its car sales growth would slow significantly this year. Hyundai Motor Company also said yesterday that the popularity of the electric vehicle market is declining.
LGES said in a statement: “Due to several factors, the global electric vehicle market will grow by about 20% this year, including the North American market, which is expected to remain around 30%.”
The company said it expects revenue growth in 2024 to be in the middle of the 0%-10% range, keeping the 2024 capital expenditure level close to the previous year's level — this year's capital expenditure will be similar to last year's 10.9 trillion won. LGES added that the production capacity of batteries eligible for the US Inflation Reduction Act tax credit is expected to be around 45-50 GWh this year, more than double that of last year.