Umicore to Cut $1.51 Billion in Capital Expenditure Amid Slower EV Growth

Belgian metals recycling company Umicore announced plans to reduce its capital expenditure by €1.4 billion ($1.51 billion) between 2025 and 2028, bringing total investments down to €1.6 billion. The company’s battery cathode materials division will bear the brunt of these cuts, with €800 million slashed from its budget due to weaker-than-expected electric vehicle (EV) sales as automakers resist policies aimed at phasing out fossil fuels. The decision reflects slower EV adoption rates globally.

Umicore, which supplies battery materials such as nickel, manganese, and cobalt to major automakers like Nissan, has faced significant challenges in its battery materials segment. In 2024, the company incurred a €1.6 billion impairment related to its Chinese battery materials operations, primarily affecting property, plant, and equipment. This impairment underscores the financial pressures on the sector.

Despite these setbacks, Umicore has outlined ambitious financial targets for the coming years. It projects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of €720 million–€780 million in 2025 and expects this figure to rise to €1 billion–€1.2 billion by 2028. The company aims for a recovery in profitability through operational efficiencies.

The company’s strategic adjustments come amid broader industry challenges, including a slowdown in EV sales growth and increased competition from lower-cost lithium iron phosphate batteries. Umicore’s decision to delay major investments in battery recycling facilities further highlights the cautious approach being adopted by companies in response to market uncertainties. This includes pausing large-scale European recycling projects.