SEOUL, Jan 27 (Reuters) – Battery maker LG Energy Solution ( LGES ) ( 373220.KS ) said on Friday that demand for electric vehicle (EV) batteries in North America will remain strong this year, boosting its revenue. Inflation.
The South Korean company, which owns Tesla ( TSLA.O ), General Motors Co ( GM.N ) and other suppliers, is aiming for 25-30% revenue growth this year to reach 33.3 trillion won ($27 billion). said that ) from income.
LGES’s fourth-quarter profit tripled as it ramped up production to address a large backlog of orders from automakers rushing to get a bigger slice of the growing electric vehicle market.
It plans to increase capital spending by 50% or more this year compared to 2022.
Asked whether a series of price cuts by major client Tesla would affect battery prices, LGES said it expected a limited impact on overall battery prices.
Tesla said on Wednesday that its aggressive price cuts have fueled a wave of demand for its vehicles, allaying concerns that a weak economy will dampen buyer interest.
“Although we see some negative macro issues such as high interest rates and inflation, EV demand will remain strong, especially as Tesla as well as other automakers enter into an apparent EV price war,” Kang Dong-jin said. An analyst at Hyundai Motor Securities.
While LGES noted some negative economic factors, particularly softening EV demand in Europe, the company gave a positive outlook on the North American market, where the company sees an increasing number of customers applying to qualify for batteries made in the USA. Federal EV subsidies.
The company, which has joint battery plants with GM, Stellantis NV ( STLA.MI ) and Honda Motor Co Ltd ( 7267.T ) in North America, said its battery order volume had risen to 385 trillion by the end of December. More than 15 times its projected 2023 revenue.
LGES said in a conference call that it expects nearly half of its global battery manufacturing capacity to be designated for the North American region in the future.
LGES currently supplies batteries to Tesla from China, and said it is in “active discussions” with the Elon Musk-controlled company and other electric vehicle startups to supply batteries from the supplier’s proposed Arizona plant.
LGES said it was reviewing investment commitments at the proposed Arizona plant, without elaborating.
LGES reported an operating profit of 237 billion won ($193 million) for the October-December period, compared with 76 billion won a year ago.
That compares with an average analyst forecast of 256 billion compiled by Refinitiv SmartEstimate.
It missed analysts’ estimates due to one-time costs such as energy storage system-related provisions and year-end bonuses.
Revenue for the quarter rose 92% to 8.5 trillion won, LG Energy said in a regulatory filing.
Shares of LGES, carved out of LG Chem Ltd ( 051910.KS ), fell 0.4% in afternoon trade, compared with a 1% rise in the KOSPI ( .KS11 ) at the market’s start last year.
($1 = 1,232.3200 won)
Reporting by Heekyong Yang, Hyunsu Yim, Joyce Lee; Edited by Christian Schmollinger
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