LG Energy Solution's domestic plant in Ochang, North Chungcheong Province, is seen in this undated file photo provided by LG Energy Solution. Yonhap

LG Energy Solution (LGES), Korea's leading battery maker, said Thursday its first-quarter net profit plunged 62 percent from a year earlier due to slowing electric vehicle sales.

Net profit for the three months ended in March plummeted to 212.1 billion won ($154 million) from 562 billion won in the same period of last year, the company said in a statement.

"Falling metal prices which were reflected in battery prices and lower demand for EVs weighed on the quarterly bottomline," the statement said.

Despite such unfavorable market conditions, the company continued its investments in battery production facilities in the March quarter for future growth, it said.

In the first quarter, LGES' joint venture with General Motors began production at their second battery plant in the United States to benefit from the U.S. Inflation Reduction Act (IRA).

The IRA gives up to $7,500 in tax credits to electric vehicle (EV) buyers whose vehicles were assembled in North America and made with minerals mined and processed in the U.S. or countries or regions that have free trade agreements with Washington.

Operating profit also dropped 75 percent to 157.3 billion won in the first quarter from 633.2 billion won a year ago. Sales fell 30 percent to 6.12 trillion won from 8.74 trillion won.

In North America, LGES currently operates three battery cell plants — the first and second plants under the joint venture (JV) with GM, and one in Holland, Michigan. Plants under JVs with GM, Hyundai Motor, Honda Motor and Stellantis N.V. are being constructed in the U.S. states of Michigan, Georgia and Ohio, as well as Ontario, Canada, respectively.

LGES said it will begin operations of its 45 gigawatt-hour plant under JV with Stellantis in the second half.

In other regions, the company has plants in Korea, Poland and China, with a plant set to start production in Indonesia in the first half of 2024. (Yonhap)