With all-electric vehicle demand not quite growing at expected levels recently, automakers like Ford have dialed back investments in that area, and delayed or canceled certain EV models, too. This shift has also impacted battery suppliers, as one would expect, and that includes LG Energy Solution, which provides The Blue Oval with battery packs for the standard range Ford Mustang Mach-E and E-Transit. LG posted some disappointing earnings in Q3 2024, and its seems as if that slump continued in Q4 as well.
According to Bloomberg, LG Energy Solution reported a preliminary 225.5 billion won ($154 million USD) operating loss in Q4 2024, which fell short of analyst estimates of a 16.4 billion won profit. The company’s sales dropped by 19 percent versus Q4 2023 to 6.45 trillion won as well, which sent its shares plunging by as much as four percent following the release of this earnings report.
LG held an 11.2 percent share of the global EV battery market in Q3 2024, but is being impacted by slowing EV sales – and as a result, automakers are cutting orders for batteries as well. Making matters worse for LG and its rivals, EV battery prices have dropped significantly as of late as well – by around 20 percent in 2024, which analysts blame on overcapacity. Battery makers have begun slashing prices as a way to beat the competition and gain market share, but currently, China-based BYD and CATL dominate the market with a 52 percent combined share.
Though LG and Ford nixed plans to build a joint-venture battery plant in late 2023, the battery maker will 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 recently 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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