(Bloomberg) -- Umicore SA is projecting two more years of losses at its battery materials division as automakers delay orders amid a sharp slowdown in demand for electric vehicles.
The unit, which is walking back its expansion plans, is recording a €1.6 billion ($1.7 billion) impairment, Umicore said Friday. The business sees operating losses next year and in 2026, with positive returns expected only in the last years of this decade.
It’s the latest bout of bad news for investors in the Belgian firm, which has aspirations to be a key player in the global EV battery-materials supply chain. Umicore in June cut the division’s annual outlook after replacing its CEO amid a broad strategic review of its battery business. It operates a joint venture with Volkswagen’s battery unit and has contracts with ACC and TotalEnergies.
“We are adjusting to the new reality in battery materials,” new Chief Executive Officer Bart Sap said during an earnings call. The manufacturer will update investors at a capital markets day in the first quarter of next year.
Umicore said its outlook on the market has changed, citing at least 18 months of delays “in the ramp-up of its customer contracted volumes.”
The company is postponing a decision to invest in a large-scale European battery recycling plant, with start of production anticipated in 2032 at the earliest. Separately on Friday, BASF SE said it would pause plans for a battery recycling site in Spain.
There’s been a broad resetting of expectations in the global EV industry. General Motors Co. this month walked back an EV production goal, while Ford Motor Co. is scaling back battery orders amid slow sales and spiraling losses.
Umicore shares are down around 45% this year.
--With assistance from Mark Burton.
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