Seoul: LG Energy Solution Ltd. announced a first-quarter net loss as the global demand for electric vehicle (EV) batteries decreased, impacting their earnings negatively. The company reported a net loss of 944 billion won (US$635.8 million) for the first three months of the year, a significant drop from a net profit of 227 billion won recorded during the same period last year.

According to Yonhap News Agency, LG Energy's quarterly performance was affected by reduced sales of EV batteries to key customers and increased costs from the initial setup of an energy storage system (ESS) plant in the United States. The company also reported an operating loss of 207.8 billion won, a stark contrast to the 374.7 billion won operating profit from the previous year. Additionally, sales fell by 2.5 percent to 6.55 trillion won from 6.72 trillion won.

In response to the declining demand in the automotive sector, Chief Executive Kim Dong-myung announced last month that the company would repurpose some of its EV battery production capacity to focus on manufacturing ESS products. This strategic shift involved converting part of the EV battery production line at the Ultium Cells plant in Tennessee to produce ESS systems. Kim emphasized the company's goal to increase the share of ESS and new businesses to the mid-40 percent range over time, from the current 20 percent, to achieve a more stable and balanced portfolio.