The company has signed a US$4.3 billion deal to supply Tesla with energy storage system batteries, as the US automaker looks to reduce reliance on Chinese imports due to tariffs
[SEOUL] Battery maker LG Energy Solution (LGES) said on Monday that its third-quarter operating profit likely rose 34 per cent as US consumers rushed to buy electric vehicles (EVs) to take advantage of government incentives that expired on Sep 30.
The South Korean company, which supplies EV batteries to General Motors and Tesla, estimated its operating profit was 601 billion won (S$547 million) during the July to September period, up from 448 billion won in profit a year earlier.
The preliminary figure beat a 528 billion won profit forecast compiled by LSEG SmartEstimate that was weighted towards analysts who are more consistently accurate.
Its profit may have been boosted by the surge in US EV sales ahead of the end of a US$7,500 federal tax credit in September, analysts said.
LGES warned in July of a further slowdown in EV demand by early next year due to the elimination of the tax credits as well as US import tariffs imposed by US President Donald Trump’s administration.
LGES shares were up 1.5 per cent in a wider market that was down 1.4 per cent.
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The company would have made a 236 billion won operating profit excluding US battery manufacturing incentives it received under the US Inflation Reduction Act, the company said in a regulatory filing.
LGES will release detailed earnings on Oct 30.
Energy storage, Georgia raid
LGES has tried to boost production of batteries for energy storage systems (ESS) to offset sluggish EV demand and improve profits in the second half of this year.
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The company has signed a US$4.3 billion deal to supply Tesla with energy storage system batteries, as the US automaker looks to reduce reliance on Chinese imports due to tariffs.
In September, LGES suffered a setback with its joint battery factory with Hyundai Motor in the United States. Construction has been suspended in the wake of an immigration raid on the Georgia facility in early September that led to the arrest of hundreds of South Korean workers.
Hyundai Motor CEO Jose Munoz said last month that the factory was facing a minimum startup delay of two to three months after the raid.
LGES said early this month that it would gradually resume US business trips for its employees and subcontractors, a day after the Trump administration agreed to allow South Koreans to work on equipment at US sites under existing temporary visas. REUTERS
