South Korean battery maker LG Energy Solution said on Thursday it would readjust investment plans and cut additional costs to cope with a long-term slowdown in electric vehicle sales. "In the electric vehicle market, we will take measures to cope with unprecedented challenges," LG New Energy CEO Kim Dong-myung said in a New Year's message to employees. He did not provide further details.
In recent years, challenges from Chinese competitors and their cost competitiveness have become major threats to Korean automotive battery manufacturers.
In addition, EV battery costs, driving range, lack of charging infrastructure and concerns about lithium-ion battery fires have added to the difficulties faced by battery companies.
Jin Dongming expects that once market concerns about these factors are alleviated or resolved, sales of electric vehicles will pick up after 2026.
In the first three quarters of 2024, LG New Energy's net profit dropped to 749.62 billion won ($511 million) from 1.44 trillion won in the same period last year, almost halving.
To make up for the reduction in battery demand, the company plans to expand non-electric vehicle businesses such as energy storage systems (ESS) and develop next-generation battery technologies such as all-solid-state and dry electrode processes.
The company said it would convert some battery production lines at factories around the world to produce energy storage systems, where demand is rising.