The Seoul-based company revealed a stark 58% decline in operating profit for the quarter ending June 30, amounting to 195.3 billion won ($141 million). This figure fell short of analyst expectations, which had projected earnings of 282 billion won, according to data compiled by Bloomberg. Exacerbating the situation, LG Energy Solution posted an operating loss of 252.5 billion won when excluding a tax credit from the US Inflation Reduction Act. Revenue also took a hit, plummeting by 30% to 6.2 trillion won.

Market Challenges and Competitive Pressures

LG Energy Solution, a key supplier for automakers such as Tesla Inc. and General Motors Co., has been grappling with multiple challenges. The slowdown in EV sales globally, coupled with a decline in lithium prices affecting selling prices, has significantly impacted the company’s financial performance. Moreover, automakers’ increasing pressure to reduce EV costs amid high interest rates has further strained profit margins for battery suppliers.

Global Market Dynamics

Recent market trends underscore LG Energy’s struggles. Tesla’s share of the global EV market dipped to 11.1% in the first half of this year, down from 14.8% a year earlier, reflecting intensifying competition from other automakers with newer EV offerings. In Europe, major companies such as Volkswagen AG and Stellantis NV are reevaluating their battery projects, signaling a broader industry slowdown.

Looking Ahead

Analysts remain cautious about the immediate future of the EV battery market. “The price of batteries for EVs dropped significantly, making it crucial for automakers to wait for further declines in costs,” remarked Dongjin Kang, an analyst at Hyundai Motor Securities Co. in Seoul. “This price reduction could potentially lower EV battery costs by approximately $4,000, impacting purchasing decisions moving forward.”

Stock Market Response

Following the disappointing earnings report, LG Energy Solution’s shares initially fell by 1.4%, stabilizing at little changed levels in subsequent trading. The company is set to release final results later this month, which could provide further insights into its financial health amidst ongoing market challenges.

For more details on LG Energy Solution Ltd.’s financial performance and the global EV market outlook, visit