The nation's largest battery maker posted a consolidated operating loss of 207.8 billion won ($139.7 million) for the January to March period, reversing an operating profit of 374.7 billion won a year earlier, according to a regulatory filing on Thursday.
Revenue slipped 2.5 percent year-on-year to 6.555 trillion won, while net losses ballooned to 944 billion won.
Experts say the deterioration stemmed largely from a steep drop in the subsidies cut under Washington's Inflation Reduction Act, which fell to 189.8 billion won — just 41.5 percent of the 457.7 billion won booked a year ago. Ramp-up costs at five newly expanded North American ESS production sites and reduced pouch-type EV battery shipments to a major customer compounded the drag.
Despite the red ink, LG Energy Solution laid out an aggressive blueprint to reshape its revenue mix around energy storage. The company said it would raise the share of ESS in total sales from about 25 percent in the first half to 35 percent by year-end, up from below 10 percent in 2025.
"We secured an ESS order backlog of about 440 gigawatts in North America as of the end of April, and aim to build more than 50 gigawatts of ESS battery production capacity in the region by year-end," LG CNS CFO Lee Chang-sil said during an earnings conference call.
To meet surging demand from power grid operators and AI data center developers, the company plans to convert multiple EV battery lines to ESS output at plants in Michigan, Ontario, Lansing and joint ventures with Honda and General Motors.
The CFO projected second-quarter results would improve by about 10 percent from the first quarter on robust North American ESS demand and healthy appetite for high-nickel EV and hybrid batteries in Europe.
Lee forecasted revenue growth of 15 to 20 percent in the second half relative to the start of the year, adding that the company aims to turn a profit without relying on U.S. production subsidies over the longer term.
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