Tesla provider LG Power Resolution (LGES) warned of gradual income development in 2024. The South Korean battery provider and Tesla CEO Elon Musk seem to share comparable issues about excessive rates of interest affecting electrical car automotive gross sales.
LGES introduced its Q3 2023 earnings just lately. The Korean firm warned of slowing income development in 2024 through the announcement. It defined that international financial uncertainties would possibly have an effect on electrical car automotive gross sales.
Based on native Asian information retailers, LGES joins the rising checklist of automakers and suppliers who’ve proven issues about EV demand throughout rising rates of interest. Corporations concern excessive rates of interest might enhance financing prices and hinder development in main economies like China and Europe, impacting automotive patrons in the long term.
“LGES shares have been down even earlier than the earnings announcement largely due to GM’s earnings in a single day, however we noticed additional drops throughout LGES’ incomes convention name as a result of the corporate mentioned it expects income development in 2024 wouldn’t be as huge as what they noticed in 2023, which had an affect on traders who already have been involved about demand,” mentioned Kang Dong-jin, an analyst at Hyundai Motor Securities.
Tesla CEO Elon Musk shared comparable issues about rates of interest through the firm’s final earnings name.
“I’m apprehensive in regards to the excessive rate of interest setting that we’re in. I simply can’t emphasize this sufficient: that the overwhelming majority of individuals shopping for a automotive is in regards to the month-to-month fee. And as rates of interest rise, the proportion of that month-to-month fee that’s curiosity will increase naturally,” commented Musk.
“If rates of interest stay excessive or in the event that they go even increased, it’s that a lot more durable for folks to purchase the automotive. They merely can’t afford it,” he mentioned.
LGES posted a income of KRW 8.22 trillion, down 6.3% quarter-on-quarter and a rise of seven.5% year-over-year. It reported an working revenue of KRW 7.31.2 billion, up 58.7% quarter-on-quarter and 40.1% yoy.
LG Power Resolution Q3 2023 by Maria Merano on Scribd