(LEAD) LG Energy Solution swings to Q1 loss amid EV market slowdown

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SEOUL, April 30 (Yonhap) — LG Energy Solution Ltd. said Thursday it swung to a net loss in the first quarter from a year earlier, as weakening global demand for electric vehicle (EV) batteries weighed on earnings.

For the first three months of this year, the company shifted to a net loss of 944 billion won (US$635.8 million) from a net profit of 227 billion won a year ago.

“Lower sales of EV batteries to key customers and higher costs associated with the initial ramp-up of an energy storage system (ESS) plant in the United States weighed on quarterly performance,” a company official said.

It also shifted to an operating loss of 207.8 billion won from an operating profit of 374.7 billion won over the cited period. Sales fell 2.5 percent to 6.55 trillion won from 6.72 trillion won.

Last month, Chief Executive Kim Dong-myung said the company plans to repurpose some EV battery production capacity to manufacture ESS products, in response to softer demand from the automotive sector.

Under the plan, part of the EV battery production line at its Ultium Cells plant in Tennessee has been converted to produce ESS systems.

“The company aims to increase the share of ESS and new businesses to the mid-40 percent range over time, from around 20 percent currently, to build a more stable and balanced portfolio,” Kim said at a shareholders meeting last month.