Though sales of all-electric vehicles continue to rise, consumers haven’t quite gravitated toward those types of models as quickly as expected over the past year or so. As such, automakers including Ford have scaled back production plans, delayed or canceled certain EV models, and due to those cutbacks, aren’t buying quite as many batteries as previously expected. This lull has impacted battery suppliers in a big way, as we saw recently when CATL posted disappointing Q3 2024 financial results. It isn’t alone either, as another Ford EV partner – LG Energy Solution – also had a rough third quarter.
In Q3 2024, LG posted a consolidated revenue of KRW 6.8778 trillion ($4,971,232,800 USD), which is an 11.6 percent increase quarter-over-quarter, but also a 16.4 percent decrease year-over-year. LG’s operating profit came in at KRW 448.3 billion ($324,020,346 USD), a 129.5 percent increase versus Q2 and a 38.7 percent decrease compared to Q3 2023. This operating profit figure includes the estimated IRA tax credit amount of KRW 466 billion ($336,753,865 USD) – minus that, LG would have recorded a quarterly operating loss of KRW 17.7 billion ($12,790,865 USD).
“Expanded sales to major European automakers and increased production at our joint venture facilities in North America and Indonesia, as well as substantial ESS revenue growth from grid-scale projects, improved the overall revenue compared to the previous quarter,” said Chang Sil Lee, CFO of LG Energy Solution. “We also saw quarter-on-quarter improvements in the operating profit excluding IRA tax credit effect on the back of improved utilization rate led by shipment increase in both EV and ESS batteries, as well as reduced unit cost burden in line with metal price stabilization.”
Despite this less than stellar financial performance, LG has big plans for the future – especially as it pertains to the company’s relationship with Ford. As Ford Authority previously reported, LG Energy Solution plans to move some Ford Mustang Mach-E battery production (the NCM battery for extended range models) from Poland to Holland, Michigan, which will enable the EV crossover to become eligible for the Inflation Reduction Act of 2022’s federal clean energy tax credits. Additionally, LG and Ford just signed an agreement that will result in the company’s batteries being used in electrified Blue Oval commercial vans in Europe starting in 2026, too.
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