SK On, Ford agree to dissolve $11B battery joint venture across 3 U.S. factories

SK On, a Korean battery maker, and Ford Motor have decided to dissolve their $11 billion joint battery venture across three U.S. factories, opting to split the facilities between the two parties.

The move comes amid a slowdown in the electric vehicle market, as Ford simultaneously overhauls its EV strategy.

Under the mutual agreement announced Thursday, Ford will assume full ownership of two plants in Kentucky, while SK On will take full control of the facility in Tennessee. The deal is expected to close by the first quarter of 2026, pending regulatory approvals, with workforce considerations to be addressed during the transition.

The two companies in 2022 formed a venture, BlueOval SK, and announced $11.4 billion for the three plants. Once operational, the plants will together have 120 gigawatt-hours of annual capacity, enough to make 1.2 million EVs per year.

A plant in Kentucky is under operation, while the start of production in Tennessee and the No. 2 plant in Kentucky have been delayed due to sluggish demand.

Amid a slowdown in global EV sales, Ford has shifted its strategy toward internal combustion engine models and the rollout of affordable electric pickups and EVs powered by lithium iron phosphate (LFP) batteries. It has also been reported that Ford is discussing potentially discontinuing the F-150 Lightning trucks.

Currently, SK On only produces the more expensive nickel-cobalt-manganese (NCM) cells and has yet to fully develop its LFP batteries for EVs.

“For the previously contracted volumes of Ford’s EVs, production will continue at the Tennessee facility,” a spokesperson for SK On said.

“This agreement represents a strategic realignment of assets and production scale to enhance operational efficiency. At the 45 gigawatt-hour Tennessee plant, SK On plans to supply batteries for Ford and various other customers’ EVs as well as energy storage systems, focusing on profitability and strengthening our foothold in the North American market.”

SK On supplies batteries to Hyundai Motor, Kia and Volkswagen, Nissan and U.S. EV startup Slate. The battery maker is also building a $5 billion battery plant with Hyundai Motor Group in Bartow County, Georgia.

BY SARAH CHEA [chea.sarah@joongang.co.kr]