Tesla battery supplier LG Chem forecasts record third-quarter profit

  • Orders from Tesla are being seen as one of the major reasons for an upbeat outlook for LG Chem.
File photo of LG Chem Ltd lithium-ion batteries, designed and integrated by NEC Corp. (Bloomberg)
File photo of LG Chem Ltd lithium-ion batteries, designed and integrated by NEC Corp.

South Korea's LG Chem Ltd, an electric vehicle (EV) battery supplier for Tesla and a petrochemicals maker, said on Monday its third-quarter operating profit likely jumped to a record high, beating analysts' estimates.

The company did not elaborate on the reasons for its upbeat outlook but analysts attributed it to orders from Tesla and the coronavirus pandemic that lifted demand for home appliances - one of the applications for petrochemicals products.

Also check these Vehicles

Find more Cars
Tesla Model S (HT Auto photo)
UPCOMING
75 kWh 200 396 km
₹70 Lakhs - 1 Cr
View Details
Tesla Model 3 (HT Auto photo)
UPCOMING
82kWh 225 kmph 555 km
₹ 70 - 90 Lakhs
View Details
Mg 4 Ev (HT Auto photo)
UPCOMING
64kWh 160 Kmph 350 km
₹ 30 - 32 Lakhs
View Details
Tata Sierra Ev (HT Auto photo)
UPCOMING
69 kWh 170 Kmph 420 Km
₹ 25 - 30 Lakhs
View Details
Tata Harrier Ev (HT Auto photo)
UPCOMING
50 kWh 400 Km
₹ 22 - 25 Lakhs
View Details
Honda Elevate Ev (HT Auto photo)
UPCOMING
₹ 18 Lakhs
View Details

LG Chem estimated that its operating profit jumped 159% to 902 billion won ($788.94 million) in the quarter ended September, above the 746 billion won analyst forecast by Refinitiv SmartEstimate.

Revenue likely rose 9% to 7.5 trillion won from a year earlier, the company said.

The firm is expected to release detailed earnings later this month.

LG Chem, along with China's CATL, supplies batteries for Tesla's electric cars made in Shanghai. Tesla posted record quarterly deliveries in the third quarter.

Analysts expect LG Chem's battery business to remain profitable in the third quarter and its mainstay petrochemicals business to post solid profits.

Despite the rosy outlook, LG Chem shares fell 2.3% over concerns of fire risks associated with its battery cells for Hyundai Motor's Kona electric vehicles.

LG Chem said faulty battery cells were not the cause of fires in Kona EVs, and the exact cause had not been determined.

Tesla's long-term plan to produce its own cells have hurt LG Chem shares, which had rallied this year due to EV expectations.

LG Chem shares also have been under pressure after it said last month that it plans to separate its battery business as an independent unit.

($1 = 1,143.3100 won)

First Published Date: 12 Oct 2020, 07:34 AM IST
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city

Want to get the best price for your existing car?

Powered by: Spinny Logo
By clicking "View Offers" you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.