With business prospects still in doubt, South Korean battery makers are implementing cost-saving measures that affect employees at all levels, including management.
According to the Korea Times , it all stems from Donald Trump's campaign promise to remove regulations on internal combustion engine vehicles and revoke tax incentives for electric vehicles under the Inflation Reduction Act (IRA). These could make it more difficult for the electric vehicle industry, which is experiencing a slowing growth rate, leading to lower demand for electric vehicle batteries.
Many Korean battery businesses may lose hundreds of millions of dollars
One of the industry leaders, Samsung SDI, began implementing emergency mode last summer, and the results have been positive. At the start of the new year, company executives encouraged employees to prepare for a challenging business environment in 2025 and to expect improvements in 2026. However, on January 2, the company announced that it was canceling overall performance incentive (OPI) bonuses for battery division and office workers. The bonuses, which could previously amount to 32% of annual salary, are now only available to employees developing advanced materials.
Samsung SDI and other Korean battery makers expected to report losses in Q4 2024
“This year, the business environment is expected to become more challenging due to increased uncertainties surrounding the return of Donald Trump and the ongoing political instability around the world,” Samsung SDI CEO Choi Joo-sun said in his New Year’s speech, calling on employees and executives to “eliminate unnecessary processes and improve efficiency.”
LG Energy Solution (LGES) is no exception, requiring employees to fly economy class for trips under eight hours and encouraging remote meetings to save costs. LGES spends about $68 million a year on these trips. Its subsidiary LG Chem also advised employees to take annual leave, reduced bonuses, and froze hiring.
“As it is difficult to make a significant profit this year, short-term cost-cutting measures are necessary,” LGES CEO Kim Dong-myung said, predicting that the EV market will recover in 2026 at the earliest.
SK On went further, introducing voluntary early retirement and allowing employees to take unpaid leave since last September. The company also cut two of its five senior management positions and appointed a former SK Hynix R&D director as its manufacturing chief.
Analysts predict that these cost savings could be linked to the companies’ potential losses in the fourth quarter of 2024. Official data will be released at the end of January, but forecasts suggest that LGES and SK On could suffer losses in the quarter. LGES is expected to lose $176 million, while SK On could lose around $136.7 million. Samsung SDI is also expected to record its first operating loss in three years from its electric vehicle battery business, with quarterly profit falling 99% year-on-year to $3.4 million.
Source: https://thanhnien.vn/ong-donald-trump-khien-cac-hang-pin-han-quoc-lao-dao-185250106131321807.htm
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