SK Innovation has said its SK On battery making unit was still on target to break even in the second half of this year after a forecast beating first quarter operating profit.

The parent company posted operating profit of KRW625bn (US$454m) for the January to March period, versus KRW375bn a year earlier and an average analyst forecast of KRW466bn as revenue fell 1.5% to KRW18.9 trillion, Reuters reported.

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“While we saw drops in EV battery shipment in the first quarter… we expect to see an improved market environment backed by launches of new EVs in North America,” SK On chief financial officer Kim Kyunghun said in a post-earnings conference call.

The report said SK On, whose customers include Ford, Volkswagen and Hyundai Motor, widened its operating loss to KRW332bn in the first quarter from KRW18.6bn a quarter before as EV battery shipments fell. However, it maintained its target to break even in the second half.

“When… Hyundai Motor kicks off EV production in the United States later this year, it would help raise SK On’s EV battery shipment and amount of tax credit received under the US Inflation Reduction Act,” Hyundai Motor Securities analyst Kang Dong-jin told Reuters.

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The news agency said analysts were hopeful SK On battery shipments would increase later this year but noted persistent near term uncertainty over EV demand due to car buyers’ preference for hybrid vehicles.

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Reuters noted SK major SK ON automaker customer Ford had last month said it had delayed the launches of three row EVs in Canada and its next generation electric pickup truck built in Tennessee.