In a massive shakeup for the US electric vehicle supply chain, Ford and South Korean battery giant SK On announced today that they are ending their massive “BlueOval SK” joint venture.
The two companies will effectively split the custody of the three massive battery factories they were building together, with Ford taking the Kentucky site and SK On taking the Tennessee site.
Back in 2021, Ford and SK Innovation (SK On’s parent) announced a massive $11.4 billion investment to build three battery gigafactories in the US: two in Kentucky and one in Tennessee. It was, at the time, the single largest manufacturing investment in Ford’s 118-year history.
The idea was to create a vertically integrated battery supply chain for Ford’s next-generation electric trucks and SUVs.
But today, SK confirmed reports that they are dissolving the JV structure entirely.
According to the announcement, Ford will take full ownership of the two battery plants in Kentucky. One of these plants had already begun initial operations earlier this year, while the second is still under construction.
SK On, meanwhile, will take full ownership of the BlueOval City battery plant in Tennessee.
Ford acknowledged the announcement from SK, but it refused to comment:
We are aware of SK’s disclosure and we have nothing further to share at this time.
The South Korean battery maker was surprisingly candid about the reasoning, stating that the split allows them to “supply batteries for both electric vehicles and energy storage systems not only to Ford but to a wider range of customers.”
This confirms that SK On didn’t want to be tied exclusively to Ford’s production volumes, which have been fluctuating wildly over the last year as the automaker adjusts its EV strategy. SK On explicitly mentioned expanding into the Energy Storage System (ESS) market,a sector that is booming right now, using the capacity at the Tennessee plant.
The deal is expected to close in the first quarter of 2026.
This comes amid narratives of “slowing EV demand” from legacy automakers and a changing political landscape in the US that has introduced uncertainty following the end of federal incentives.
Electrek’s Take
This is a huge deal, and frankly, it smells like trouble for Ford’s original volume targets.
When you form a multi-billion-dollar JV, you do it to lock in supply and share the massive capital burden. Breaking it up less than four years later, before all the plants are even running, suggests that the original plan is effectively dead.
In short, it would suggest Ford does not want the battery capacity from the factory it gave to SK.
This is not exactly surprising considering Ford’s pullback of EV plans, such as the F-150 Lightning, recently.
For SK On, this looks like a smart pivot. If Ford isn’t buying enough cells to fill the lines because they are delaying EV models or pivoting to hybrids, SK needs the freedom to sell those batteries to Hyundai, VW, or into the energy grid storage market, which is insatiable right now.
They basically just freed up 45 GWh of capacity in Tennessee to sell to whoever writes the biggest check.
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