Seoul, Nov 3 — LG Energy Solution Ltd. (LGES), South Korea's leading battery maker, said on Tuesday it swung to a net loss in the third quarter from a year earlier amid a prolonged slowdown in the electric vehicle (EV) market.
In the three months ended in September, the company shifted to a net loss of 296.9 billion won (US$221.3 million) from a net profit of 536.1 billion won in the same period last year, the company said in a regulatory filing.
Operating profit rose 25.7 percent to 756 billion won in the third quarter from 601.3 billion won a year earlier, reports Yonhap news agency.
"Increased energy storage system (ESS) shipments to North America and sales of mid- and low-priced pouch-type batteries in Europe helped support earnings despite a prolonged slowdown in the EV sector," the company said.
Sales jumped 59 percent to 9.64 trillion won from 6.06 trillion won a year earlier.
LGES benefited from 416.9 billion won in tax credits under the Advanced Manufacturing Production Credit (AMPC) program of the U.S. Inflation Reduction Act, the company said.
Excluding the AMPC benefits, the company posted an operating profit of 339.1 billion won in the September quarter.
For the January-September period, the company shifted to a net loss of 1.57 trillion won from a net profit of 853.3 billion won in the year-ago period.
Operating profit fell 54.9 percent to 661.6 billion won in the first nine months from 1.47 trillion won a year ago. Sales rose 26 percent to 23.75 trillion won from 18.84 trillion won.
LGES operates seven battery plants in North America, including six in the United States and one in Canada. Five of the plants produce batteries for both ESSs and EVs, while the remaining two manufacture EV batteries exclusively.
Amid growing demand for ESS batteries, the company plans to have more than 50 gigawatt-hours (GWh) of lithium iron phosphate (LFP) battery cell production capacity in North America by the end of December.
The capacity will be spread across three wholly owned plants -- LG Energy Solution Michigan-Lansing, LG Energy Solution Michigan-Holland and NextStar Energy in Ontario, Canada -- and two joint venture facilities, one with Honda Motor Co. in Ohio and the other with General Motors Co. in Tennessee.
Battery makers have stepped up efforts to secure ESS battery orders to offset sluggish demand for EV batteries amid a prolonged downturn in the electric car market.
The US ESS market is projected to grow fourfold by 2031, reaching a capacity of 499 GWh, according to market research firm Wood Mackenzie.