LG Slows EV Cell Plant With GM in US as Political Worries Swirl

Heejin Kim

Mon 22 July 2024 at 1:43 pm

(Bloomberg) -- South Korean battery maker LG Energy Solution Ltd. is slowing construction of its third plant with General Motors Co. in Michigan amid lacklustre demand for electric cars and as foreign firms worry about political change in the US...

Battery makers globally are suffering from lower sales as consumer demand for electric cars wanes. For Korean companies in particular, the looming US presidential election is another big risk...

Former President Donald Trump has vowed to take action against the so-called Inflation Reduction Act and wind back Biden’s pro-EV policies should he win the election...

GM, which had planned to have three plants with LG in the US in order to receive tax credits from the IRA, is meanwhile walking back expectations for the company’s EV program. CEO Mary Barra said last week that GM won’t have production capacity in place to build one million EVs at the end of next year, which was the previous target.
It’s not only LG expressing worries over capital outlays and weakening demand for batteries...

South Korea’s third other large cell maker, SK On Co., has also declared an emergency after generating a big loss in the first quarter...

Ford delayed the start of a second Kentucky facility as EV sales slowed. Korean battery makers may want to scale back their investment plans for battery plants in the US if there’s any change in the IRA after the US presidential election, a June report from the state-run Korea Institute for Industrial Economics & Trade said.