SK and Ford Dissolve U.S. Joint Battery Venture, Signaling Shifts in American EV Landscape
U.S. automaker Ford and South Korean battery firm SK Innovation are dissolving their U.S. battery manufacturing joint venture, potentially indicating major changes in the American electric vehicle supply chain.
A statement shows that SK On, SK Innovation's battery division, will take over the BlueOval SK factory in Tennessee, while Ford will assume control of the joint venture's factory in Kentucky. The split is expected to be completed by the end of Q1 2026, pending regulatory approvals.
Ford and SK Innovation announced plans in 2021 to build three battery mega-factories in the U.S., with a total investment of up to $11.4 billion. At the time, it was Ford's largest manufacturing investment in its 118-year history, aimed at creating a vertically integrated battery supply chain for Ford's next-generation electric trucks and SUVs.
However, the dissolution marks a shift in Ford's battery supply chain strategy, as the company has struggled for years to stem losses in its EV business.
Each Going Their Own Way
The main reason for this dissolution is the slower-than-expected EV adoption rate, combined with U.S. policy changes making the transition from gas vehicles to EVs even more challenging. Starting in October this year, the U.S. government eliminated EV purchase subsidies and weakened emissions standards for gas vehicles.
This is an additional blow for Ford, which is already facing transition difficulties. In August, Ford announced a delay in production of its next-generation F-150 Lightning electric pickup at the Tennessee factory until 2028. The company also postponed production of the electric Transit van at its Ohio factory from 2026 to 2028.
The Kentucky BlueOval factory has long suffered from underutilization. The joint venture originally planned two battery plants in Kentucky, but the second was indefinitely paused in 2024. Instead of the planned 5,000 hires, the first factory employed only 1,450 when it started operations.
These facts may reflect Ford's broader challenges in EV sales and the risks of continuing to integrate the battery business. For SK On, dissolving the JV helps find other buyers to absorb its capacity, avoiding idle production.
Facing forecasts of prolonged weak EV sales, SK On has already begun exploring buyers in other sectors. In September this year, the company signed an agreement with U.S. Flatiron Energy Development to supply LFP batteries for energy storage systems, which can power data centers and other facilities.
LG and Samsung's battery divisions are also retooling EV battery lines to produce energy storage systems.