By Kwanwoo Jun
LG Energy Solution's shares slumped after its parent company disclosed plans to significantly reduce its stake in the battery-making subsidiary.
Shares in the South Korean company, which manufactures electric-vehicle batteries for global automakers including General Motors and Ford Motor, dropped 6.9% Friday to close at 408,000 won, equivalent to $279.01, underperforming the benchmark Kospi's 1.5% fall.
The stock snapped a three-session winning streak, erasing this week's gains.
The retreat came after LG Chem said in a regulatory filing that it will keep its stake in LG Energy at around 70% in the long term, down from its roughly 80% stake currently.
LG Chem didn't detail its future stake sales but said that proceeds could be used to improve its long-term finance and boost shareholder returns.
Facing potential overhang risks from its parent's planned stake sale, LG Energy is also under pressure from its slowing EV-battery business.
Sluggish EV sales after the phaseout of tax credits for new EV purchases in the U.S. will likely lead the battery maker to post an operating loss for the final quarter of 2025 after three straight profitable quarters, Heungkuk Securities analyst J.S. Jeong said.
Demand for energy storage systems in the U.S. is growing fast, but it isn't strong enough to offset sluggish EV battery demand, Jeong said. He lowered his target price for LG Energy's stock by 8.5% to 540,000 won.
To meet strong demand for energy storage systems, LG Energy has been converting some of its EV battery production lines into ESS lines.
In the U.S., the company's ESS production is expected to rise to 30 gigawatt-hours by the end of 2026 and 50 GWh by the end of 2027, up from an estimated 17 GWh this year, DAOL Investment & Securities analyst J.W. Yoo wrote in a recent note.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
11-28-25 0409ET
