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South Korean Battery Firms Cut Jobs and Scale Back U.S. Production Amid EV Transition Slowdown

Major South Korean battery makers, LG and SK, reduce workforces and production in the U.S. due to EV industry slowdown
South Korea
l 373220.KO s 096770.KO Blue Chip 150 Mid and Small Cap 2000
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According to Nikkei, South Korean battery manufacturers LG Energy Solution and SK On are implementing workforce reductions and production cutbacks in the U.S. as the electric vehicle (EV) transition faces a slowdown, posing challenges to President Biden’s economic agenda. LG Energy Solution will lay off 14% of its Holland, Michigan workforce, citing automakers realigning EV transition speeds. Simultaneously, SK On is adjusting operations in its Georgia factory and placing employees on unpaid leave amid slowing EV industry growth.

The U.S. EV market, while witnessing a 49.8% sales increase from July to September, fell short of the 68% growth achieved in Q3 2022. Lee Hang-koo, president of the Jeonbuk Institute of Automotive Convergence Technology, attributes the U.S. EV market’s deceleration to consumer preferences for specific vehicles, which many have already purchased, along with challenges posed by vehicle prices and interest rates.

Despite these challenges, both LG and SK express optimism about the EV industry’s future. LG highlights an ongoing major expansion in Michigan and a recent partnership with Toyota, while SK emphasizes its commitment to workforce management optimization. Challenges persist, particularly regarding charging infrastructure, even as the U.S. government plans charging stations every 60 kilometers with subsidies from the Inflation Reduction Act.

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