LG Energy Solution Shares Drop as Ford EV Cutback Weighs on Outlook

LG Energy Solution shares (KRX: 373220) faced downward pressure today, closing 5.54% lower, in a direct consequence of Ford Motor Company’s decision to scale back its electric vehicle (EV) production plans. The announcement sent ripples through the EV supply chain, impacting battery manufacturers like LG Energy Solution.

The shares closed at 418,000 won, positioning the stock in bear market territory, down 20% from its late October highs. Despite this recent pullback, LG Energy Solution remains up 20.8% year-to-date, highlighting the volatility within the name this year.

Ford’s strategic pivot involves a substantial $19.5 billion writedown, encompassing $8.5 billion attributed to canceled EV models and $6 billion related to the dissolution of a battery joint venture with SK On. This restructuring signals a shift towards hybrid and extended-range vehicles, with Ford aiming for a 50% hybrid/EV mix by 2030, a notable increase from the current 17%.

As a key battery supplier to Ford, LG Energy Solution is directly exposed to these strategic shifts. The initial reaction saw LG Energy Solution shares drop 6% following Ford’s announcement. Other South Korean battery manufacturers also felt the impact, with Samsung SDI and cathode producer Posco Future M experiencing share price declines of 3.5% and 8.2%, respectively, illustrating the interconnectedness of the EV supply chain.

The EV industry faces broader challenges, including evolving policy landscapes and fluctuating consumer demand. The expiration of the U.S. federal tax credit for EVs has notably impacted sales, with Ford reporting a 61% plunge in all-electric vehicle sales in November. This downturn has prompted automakers to reassess their EV strategies, creating uncertainty for suppliers like LG Energy Solution.

Despite these headwinds, LG Energy Solution reported a strong second-quarter operating profit for 2025, reaching 492 billion won ($360.94 million), marking a 152% increase. This surge was fueled by robust demand for EV batteries and strategic U.S. tax incentives. However, the recent developments with Ford and the broader industry trends introduce potential risks to sustaining this growth trajectory.

Analysts are closely watching how LG Energy Solution adapts to these evolving market dynamics. The company’s ability to diversify its customer base and secure new contracts will be crucial in mitigating the impact of Ford’s reduced EV ambitions. Furthermore, LG Energy Solution’s technological advancements and cost-competitiveness will play a significant role in maintaining its market position.