The Korean battery maker limped to the weaker-than-expected performance during the September-December period to fall well short of the 338.2 billion won in operating profit logged during the same period a year earlier, according to a preliminary earnings announcement on Thursday.
The company recorded its first quarterly loss since reporting 372.8 billion won in losses in the third quarter of 2021, when it suffered from a massive recall for General Motors' Bolt EVs.
When excluding tax credits from the U.S. government's Inflation Reduction Act (IRA), the losses expand to 602.8 billion won. LG Energy reflected 377.3 billion won in incentives in the fourth quarter.
The U.S. Advanced Manufacturing Production Credit under the IRA offers generous tax credits to energy-friendly product manufacturers that make specific components in the United States.
Quarterly revenue came in at 6.45 trillion won, down 19.4 percent on year, to fall short of the analyst estimation of 6.77 trillion won compiled by FnGuide.
Neither an earnings breakdown nor a net profit estimate was provided. LG Energy is set to release finalized fourth-quarter earnings figures on Jan. 24.
For 2024 on the whole, LG Energy Solution's operating profit plunged 73.4 percent to 575.4 billion won. Revenue also dipped 24.1 percent to 25.62 trillion won.
The shrinking profit comes as EV sales for General Motors, its main client, have been hit hard due to falling consumer demand. EV deliveries in European markets fell 0.8 percent on year last year through the end of November, according to data by SNE Research.
LG Energy Solution declared emergency management in December to readjust planned investments and cut additional costs to ride out a prolonged slowdown in EV sales. It announced a shift in focus to energy storage systems and lithium iron phosphate batteries to defend profitability.
The battery maker's suffering is unlikely to ebb for a while as U.S. President-elect Donald Trump has warned that he will abandon tax incentives for battery manufacturers that produce batteries in the United States.
Korea's three largest battery makers — LG Energy Solution, Samsung SDI and SK On — are losing ground to Chinese players in the global market, with their combined share falling to 19.8 percent last year through the end of November, compared to 30.6 percent during the same period in 2021.
The combined share of China's CATL and BYD, meanwhile, jumped to 53.9 percent from 41 percent during the same period.
LG Energy Solution CEO Kim Dong-myung said he predicts that the "tough situation will linger through 2025, and will likely show a rebound in 2026," during a press interview in November.
LG Energy Solution shares slipped 5.5 percent to close at 353,000 won on Thursday.
