South Korean battery manufacturer LG Energy Solution announced on Monday that it holds a "cautious" outlook for revenue growth in the upcoming year, citing a significant reduction in capital expenditures due to a decline in electric vehicle demand. This announcement follows a 39% decrease in profits for the third quarter.

The company, which provides batteries for Tesla, General Motors, and Hyundai Motor, anticipates that the outcome of the U.S. presidential election next week will greatly influence the direction of the EV market, according to its Chief Financial Officer.

"Looking towards 2025, we are facing ongoing macroeconomic uncertainties and geopolitical risks, increased battery exports from Chinese competitors, and plans from automakers to produce their own batteries, which will heighten competition," stated CFO Lee Chang-Sil during an earnings call.

"We maintain a rather cautious perspective on revenue growth for next year," Lee remarked. "We foresee a significant reduction in capital expenditures next year compared to this year, aside from some critical investments that are necessary."

Earlier this year, LGES indicated plans to cut capital expenditures due to a slowdown in EV growth. The company also projected that capital expenditures for 2024 would remain similar to the previous year's figure of 10.9 trillion won.

Many automakers are revising their electrification goals, impacted by a decrease in EV demand stemming from factors such as the scarcity of affordable models, slow expansion of charging infrastructure, trade tensions, and heightened competition from lower-cost Chinese manufacturers.

A senior executive at LGES mentioned in July that demand is expected to rebound in approximately 18 months in Europe and within two to three years in the United States, largely influenced by climate policies and other regulations.

Analyst Kang Dong-jin from Hyundai Motor Securities noted, "The general consensus is that the growth rate of EV demand may decelerate if Donald Trump secures a second term, as he has indicated a desire to reduce EV tax credits."

LG Energy Solution (LGES) reported an operating profit of 448 billion won ($322.84 million) for the third quarter, aligning with its previous forecast but reflecting a decrease from 731 billion won during the same period last year.

Despite this decline, increased demand from certain European and North American automakers enabled the battery manufacturer to surpass the LSEG SmartEstimate of 374 billion won, which is derived from the average of 20 analyst projections, weighted towards those analysts with a more consistent track record.

The company noted that, without a tax credit received under the U.S. Inflation Reduction Act, it would have recorded an operating loss of 18 billion won for the quarter.

Revenue decreased by 16%, totaling 6.9 trillion won.

Following the announcement of these results, LGES' share price rose by 1.2%, outperforming a 0.9% increase in the benchmark KOSPI.