SEOUL, June 28 (Reuters) - LG Energy Solution (LGES)

has paused part of construction of its multi-billion

dollar battery factory in the U.S. state of Arizona due to

changing environment of battery market, the company said on

Friday.

The South Korean battery maker, which supplies automakers

including Tesla, General Motors ( GM ), Hyundai Motor ( HYMTF )

among others, said it has suspended the construction

of its energy storage system (ESS) battery production facility

in Arizona as it adjusts the pace of planned investment

execution flexibly to optimize its operations.

The Arizona facility, which consists of two facilities - one

for cylindrical batteries for electric vehicles (EVs) and

lithium iron phosphate (LFP) pouch-type batteries for ESS.

LGES said it would spend 7.2 trillion won ($5.21 billion) on

its Arizona facility with planned production in 2026.

"As part of such efforts, we are temporarily putting the

construction of Arizona ESS battery facility on hold. We still

believe the facility will play an important role in our North

America operations as we expect continued growth in the U.S. ESS

market. Meanwhile, the construction of cylindrical EV battery

facility is ongoing as planned," LG Energy Solution said in a

statement.

The company added it has not yet decided when to resume the

construction of its ESS factory.

Analysts noted the current trend of slowing global EV demand

has attributed to LGES' decision to temporarily halt the ESS

production site as the company finds ways to minimize cost.

In April, LGES reported a 75% plunge in the first quarter

profit, booking a 32 billion won operating loss without a tax

credit received under the U.S. Inflation Reduction Act.

($1 = 1,381.8300 won)

(Reporting by Heekyong Yang; Editing by Lincoln Feast.)