The company, which supplies batteries to Tesla, General Motors, and Volkswagen, reported an operating loss of 226 billion won ($158 million) for the fourth quarter, contrasting with a profit of 338 billion won during the same period last year.
This week, newly inaugurated U.S. President Donald Trump indicated that his administration might consider eliminating the $7,500 tax credits for electric vehicle purchases. LG Energy Solution stated that the removal of these credits would negatively impact the U.S. market.
CFO Lee Chang-sil remarked during a conference call that while changes in U.S. tariffs and subsidies could temporarily hinder the pace of electrification, he believes there will be no significant shift in the long-term trajectory of the battery industry.
The company's fourth-quarter performance was notably impacted by decreased demand from General Motors, with whom LGES collaborates on battery production for GM vehicles in North America. However, LGES anticipates a recovery in demand from this key customer starting in the second quarter as new models are introduced.
Additionally, LGES aims to achieve a revenue growth of 5%-10% this year, driven by the commencement of production at joint battery facilities with Stellantis and Honda in North America in the latter half of the year.
As part of its cost-cutting measures, LGES plans to prioritize the use of existing or previously planned production facilities rather than constructing new plants in North America. The company operates joint venture battery plants with GM in Ohio and Tennessee and acquired a stake in another battery facility in Lansing, Michigan, from GM in December.
In a New Year message earlier this month, CEO Kim Dong-myung expressed optimism about a recovery in the electric vehicle market post-2026, while also acknowledging challenges posed by the global expansion of Chinese competitors.
Revenue for the previous quarter decreased by 19% compared to the same period last year, totaling 6.45 trillion won. Following the announcement of these results, shares of LGES remained unchanged, in contrast to a 0.9% increase in the benchmark KOSPI.