Tesla's quarterly earnings miss drags down Korean secondary battery stocks

A Model Y electric vehicle stands on a conveyor belt at Tesla's Gigafactory Berlin-Brandenburg in Gruenheide, Germany, Tuesday. AP-Yonhap

As Tesla released a disappointing quarterly earnings report that largely missed its estimates on Wednesday afternoon (U.S. time), shockwaves rippled to many Korean stocks related to the secondary battery sector on Thursday's session.

According to the Korea Exchange (KRX), the bourse operator, the stock price of EcoPro Materials, an affiliate of the country's secondary battery firm EcoPro, fell to 157,100 won ($117.50) at Thursday's closing, a 9.19 percent plunge. EcoPro Materials specializes in making lithium cell core materials called precursors.

Other units of EcoPro also posted major drops during the session, with EcoPro BM falling by 5.02 percent at closing. The stock price of EcoPro finished at 490,500 won, a 3.06 percent decline. It is the company's lowest price since last April, plummeting to nearly half of its peak value recorded last year.

With the drop on Thursday, the combined market capitalization of EcoPro affiliates, including EcoPro Materials and EcoPro BM, has lost approximately 50 trillion won, compared to its peak last summer.

POSCO Future M, another major secondary battery company that focuses on producing battery materials and other advanced chemical materials, also saw its stock price decrease by 3.83 percent at Thursday's closing.

LG Energy Solution also fell by 3.29 percent at Thursday's closing, while Samsung SDI finished with a 1.84 percent drop. L&F, another secondary battery company that produces cathode active materials for lithium-ion batteries, plunged by 11.02 percent during the trading session.

Analysts view that the bearish trend of major secondary battery stocks in the country is likely to continue for a while, as global electric vehicle demand remains weak and the recovery of demand is still uncertain for the time being.

"Korean companies producing cathode materials are posting a declining trend in their export volumes. In the last quarter alone, the firms' exports decreased by 27 percent compared to the previous year. When compared to the average export volume of 74,000 tons in the first three quarters, the declining rate is more severe at 35 percent," said Han Byung-hwa, an energy analyst at Eugene Investment & Securities.

"While the plunge in Korean cathode material exports was initially attributed to the simple drop in lithium prices, it is now seen that a more significant factor is the slowdown in the growth of electric vehicles."