LG Energy Solutions warned of slowing EV battery demand in 2026 due to U.S. subsidy cuts and tariffs, prompting a pivot toward energy storage battery production.
Demand for batteries used in electric vehicles is set to slow down further in 2026 because of changes in subsidy legislation in the United States and Trump’s tariff offensive, LG Energy Solutions warned.
The company released its latest quarterly financial statement this week, which showed a higher profit, but its outlook for the industry was rather pessimistic. “U.S. tariffs and an early end to EV subsidies will put a burden on automakers, potentially leading to vehicle price increases and a slowdown in EV growth in North America,” LG Energy Solutions said, as quoted by Reuters. The One Big, Beautiful Bill that Congress passed recently includes an end to the $7,500 EV subsidy that motivated many buyers to go electric. That end is in September and is expected to affect EV sales in the United States rather dramatically. A subsidy of $4,000 for second-hand EV purchases is also going away in September. EV sales globally have been on the rise for much of the year despite the tariff tensions. In China alone, EV sales over the first four months of the year gained 35% to 3.3 million—because the government decided to extend its incentive program that encourages people to trade in their gasoline car for an EV cheaply in order to stimulate uptake. Elsewhere, however, battery electric vehicle sales have not been doing as well as hoped by their manufacturers. In fact, they are doing very far from what their manufacturers expected—so they are betting on hybrids instead. These trends are problematic for battery manufacturers who relied on the Inflation Reduction Act’s billions in pledged incentives for, among others, battery production capacity. LG has found a solution, however. It said it was going to convert EV battery manufacturing capacity to produce energy storage batteries. By Irina Slav for Oilprice.com
LG Energy Solutions U.S. Subsidies Trump Tariffs EV Sales Hybrid Vehicles Battery Demand Energy Storage Inflation Reduction Act Electric Vehicles
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