South Korea’s largest electric vehicle (EV) battery manufacturer, LG Energy Solution Ltd (LGES), this week announced it is reviewing its investment plans as it looks to cut costs in response to the slower-than-expected growth in global battery electric vehicle (BEV) sales.

The company’s CEO, Kim Dong-myung, in a New Year's message to employees confirmed that the company needs to take significant action to overcome challenges that “it has never encountered before" in the EV market.

LGES reported a 48% drop in net earnings in the first nine months of 2024, while its capacity utilization rate had dropped to 60% in the third quarter from 73% a year earlier. The company plans to implement a number of key strategy changes designed to improve efficiency and cut costs, as it looks to ride out the prolonged slowdown in BEV sales and rising competition from Chinese rivals.

These include expanding its non-EV business, by switching some production lines globally to meet growing demand for energy storage systems (ESS), and stepping up the development of next-generation battery technologies such as all-solid-state and dry electrode processes.

Kim Dong-myung said he expects BEV sales to begin to recover from 2026, once key market concerns are addressed including vehicle range, charging network coverage and safety.