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LGES to reduce 2024 capex due to slow growth in EV demand

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H2 performance to improve; external factors pose

uncertainty

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Risk factors include US election, environment policies

(Adds LGES comments from earnings conference call, background

throughout)

By Heekyong Yang and Ju-min Park

SEOUL, April 25 (Reuters) - South Korean battery maker

LG Energy Solution (LGES) said on Thursday it plans

to minimise capital expenditure this year due to slowing global

electric vehicle (EV) demand, after reporting a 75% plunge in

first-quarter profit.

The supplier of automakers including Tesla, General

Motors ( GM ) and Volkswagen reported operating

profit of 157 billion won ($114 million) for January-March on

revenue that fell 30% to 6.1 trillion won.

LGES said it would have reported a 32 billion won loss

without a tax credit received under the U.S. Inflation Reduction

Act. That would have been its first loss since listing in 2022.

Amid slow global growth in EVs, LGES said it plans to reduce

capital expenditure this year.

"While we review the priorities of our investment, such as

mid-to-long-term demand and essential expansion in the United

States, we plan to adjust the size and pace of our capex

spending," Chief Financial Officer Lee Chang-sil said on an

earnings call.

In January, LGES said this year's capital expenditure

would be similar to last year's 10.9 trillion won.

LGES said performance would likely improve in the second

half because of new EVs from U.S. customers such as GM. It also

noted risk factors for EV demand, including a U.S. presidential

election as well as governments' environment policies.

The South Korean manufacturer said it could explore more

business opportunities for its 46-series cylindrical battery

products, which analysts expect to be used in the more

affordable EVs that Tesla on Tuesday said it would introduce.

The price of LGES shares was down 2% as of 0241 GMT, versus

a 1% fall in the benchmark KOSPI.

($1 = 1,375.4800 won)