LG Energy Solution Flags Q2 Derline Conprays Automent

Written by Heekyong Yang and Joyce Lee

Seoul (Reuters) -LG Energy Solution (Reuters) from Seoul (Reuters) said on Wednesday that it expects to expect revenues in the second quarter that June will decrease to a decline from the first quarter due to the uncertainty of the US -based tariff policies.

The LGES shares advertising up to 4.4 % in midday (0300 GMT) compared to a 0.7 % decrease in the KOSPI standard.

LGES, among its clients, Tesla, General Motors and Hyundai Motor, indicated that the main car manufacturers are expected to be conservative in the purchases of batteries because the American customs tariff policies were unconfirmed.

“The manufacturers who” produce outside the United States and offer to the United States are very careful with their production strategies, “said financial director Lee Zhang Cell in a profit call.

“There were expectations that LGES would witness a recovery in revenues in the second quarter, but the company has led to a decrease in revenues of the second quarter compared to the previous quarter, which seems to have abandoned feelings,” said Kim Hyun Sue, an analyst at Hana Securities.

LEGES said on Wednesday that it is expected to reduce 2025 investments by about 30 % from 2024.

It was also placed on the construction of an ESS in Arizona, which first decides to use the capacity in the Michigan Factory, where it will start producing lithium iron batteries (LFP) for this year, one year before the plan.

LGES said it expanded the scope of ESS to alleviate the impact of slow demand for EV in North America because Chinese players will not be able to enter the market at the present time due to the definitions. The company said it will also continue to develop the supply chain that is separated from China.

LGES increased 138 % in profit in the first quarter of 375 billion WNA (261.96 million dollars), as the favorable foreign exchange rates helped reduce the effect of slowing the growth of electric car sales in the main foreign markets.

The battery maker said in a regulatory file that he would have reserved 83 billion WNA operational losses without obtaining tax credit that was received under the law to reduce inflation in the United States.

The average exchange rate in South Korea was 1,452.9 per US dollar in the first quarter, or 8.5 % of the average overall of 1,329.4. This means that insects can buy further winning the dollar gained from American sales.

Analysts said that the increase in the profits of the first quarter were strong sales by the client, General Motors. The American auto company has reported the local EV sales of 31887, or more than 94 % of the first quarter of 2024.

General Motors fell on Tuesday its annual expectations, reflecting the uncertainty surrounding the impact of the trade war on the administration of US President Donald Trump. The auto company also prompted the investor summons due to the changes in the policy of tariff for the import of the United States.

On the same day, Trump has signed a pair of executive requests to reduce the blow of the new definitions in the automotive industry, providing a mixture of tax credits and relief from other fees on materials.

LGES said that EVS sales in the comprehensive market in General Motors increased a month in March, but said that it would put a conservative assumption related to production regarding the volatility of genetically modified knowledge with the continued fluctuation of the tariff.

($ 1 = 1,431.5000 Won)

(He participated in the reports of Heekyong Yang and Joyce Lee; edited by Christopher Kushing and Kate Maybry)