By Heekyong Yang and Hyunjoo Jin
SEOUL (Reuters) -South Korean battery firm LG Energy Solution warned on Friday of a further slowdown in demand by early next year due to U.S. tariffs and policy uncertainties after it posted a quarterly profit jump.
Its major customers Tesla and General Motors warned of fallout from U.S. tariffs and legislation that will end federal subsidies for EV purchases on September 30.
"U.S. tariffs and an early end to EV subsidies will put a burden on automakers, potentially
leading to vehicle price increases and a slowdown in EV growth in North America," CFO Lee Chang-sil said during a conference call.
However, LGES said it expected to improve profits in the second half by boosting production of batteries for energy storage systems to offset the sluggish EV demand, while cutting or delaying investment plans.
LGES said its operating profit more than doubled in the second quarter, thanks to U.S. subsidies on battery production and stockpiling by some customers there ahead of potential tariffs.
It reported an operating profit of 492 billion won ($358.73 million) for the April to June period, versus a profit of 195 billion won a year earlier.
LGES would have made a 1.4-billion-won operating profit excluding a tax credit it received under the U.S. Inflation Reduction Act, LGES said in a regulatory filing.
LGES Shares were down 2.3% after the earnings announcement.
($1=1,371.5000 won)
(Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Tom Hogue and Clarence Fernandez)
