LG Energy Solution (LGES), the world’s second-largest EV battery maker, has warned of slowing revenue growth in 2024 due to global economic uncertainties affecting the outlook for electric vehicle sales. The South Korean battery firm’s shares fell nearly 7% to a more than 12-month low. LGES is a supplier to major automakers including General Motors and Tesla.
The company’s warning echoes similar concerns raised by Tesla CEO Elon Musk, who has warned that high interest rates will hit sales of electric vehicles. LGES said it expects revenue growth to slow to a mid-single-digit percentage in 2024 from a high-single-digit percentage this year. The company cited global economic uncertainties, including rising interest rates and inflation, as factors affecting the outlook for EV sales.
However, LGES said it expects demand for EV batteries to remain strong in the long term, driven by government policies aimed at reducing carbon emissions. The company is investing heavily in expanding its production capacity to meet growing demand for EV batteries. LGES plans to invest $10 billion in its US battery business over the next four years and is building a new battery plant in Ohio that will supply batteries to General Motors and other automakers. The company also plans to build a second US battery plant in Tennessee and is expanding its production capacity in South Korea and China.
LGES is confident that its long-term growth prospects remain strong despite short-term economic uncertainties and supply chain disruptions. The company’s investment in expanding its production capacity will enable it to meet the growing demand for EV batteries and maintain its position as one of the leading suppliers of EV batteries.