LG Energy Solution CEO Kim Dong-myung said Thursday that the company needs to focus on strengthening fundamentals and review ways to cut down any dissipation amid the stagnating demand for electric vehicles forecasting a troublesome outlook for the battery industry.

"As we have been pushing for aggressively winning contracts and expanding businesses, it's true that there have been a lot of inefficiencies across various sectors such as personnel, facilities, and purchases," he said in an internal note to the employees.

"Now is the time to adjust the pace of investment. It is important to secure the agility to make appropriate investments when absolutely needed and I ask each team to think deeply about ways to increase investment flexibility and efficiency."

Noting that the die-off in EV demand has changed the way the market views the battery industry, the CEO pointed out that there are companies that used to be called "the best" in their respective sectors but now are faced with big adversities as they failed to keep up with the times.

"Although we secured a lead in the market and an outstanding global production capacity, our past strengths of innovation in materials, technology and process have weakened," said Kim.

"The cold reality is that our profitability has dipped due to a lack of competitiveness in the cost structure despite the revenue growth."

The CEO warned against blaming everything on the difficult industry circumstances or being loosely optimistic about the future just because the future growth outlook is hopeful.

"The future of the battery industry is bright but having the capability to lead the future has become much harder than it was in the past," he said.

"We must accelerate our organization's innovation by completely reforming our business and product portfolios instead of wallowing in past glory."