Seoul: LG Energy Solution Ltd. (LGES), South Korea's leading battery maker, announced on Tuesday that its estimated operating profit saw a significant decline of 77 percent in the second quarter, a downturn attributed to the ongoing slump in the electric vehicle (EV) sector.

According to Yonhap News Agency, in the three-month period ending in June, LGES's operating profit decreased sharply to 113.3 billion won (US$74.1 million) from 492.1 billion won during the same time last year. The company highlighted that sluggish EV sales in the North American market, compounded by the suspension of operations at its U.S. joint venture plants since the beginning of the year, were major contributors to the poor quarterly performance.

Ultium Cells LLC, a joint venture between LGES and General Motors Co., had to temporarily cease operations at its Ohio and Tennessee plants in January due to declining demand, affecting the overall output and profitability of the company.

Despite the challenges, LGES reported a 24.8 percent increase in sales, rising to 7.56 trillion won in the second quarter from 6.06 trillion won a year ago. The company benefitted from a tax credit of 241 billion won under the Advanced Manufacturing Production Credit (AMPC) program of the U.S. Inflation Reduction Act. However, excluding this credit, LGES posted an operating loss of 127.7 billion won for the quarter.

For the first half of 2026, LGES experienced an operating loss of 94.5 billion won, a stark contrast to the operating profit of 866.8 billion won recorded in the same period last year. Nevertheless, sales increased by 10.5 percent to 14.1 trillion won from 12.7 trillion won a year earlier.

The company has scheduled the release of its final second-quarter earnings results for July 30, providing a more comprehensive overview of its financial performance during this challenging period.