Ford and SK On End $11B EV Battery Partnership
Ford and South Korean battery maker SK On are dissolving their $11.4 billion joint venture in the U.S., a surprising shift in the electric vehicle (EV) industry. Four years ago, the partnership aimed to build cutting-edge battery factories in Tennessee and Kentucky to power the next generation of Ford’s F-Series electric trucks. While the factories remain operational, the joint venture that brought them to life will no longer exist.
Credit: FordDivision of Assets Marks a New Chapter
Under the new agreement, Ford will assume full ownership and management of the twin battery plants in Kentucky. Meanwhile, SK On will continue operating the factory at the massive BlueOval SK campus in Tennessee. The two companies will maintain a strategic partnership centered on the Tennessee facility, ensuring some continuity despite the split.
Why the Joint Venture Is Ending
The decision reflects broader challenges in the EV market. Although EV sales have grown steadily, they haven’t met the industry’s ambitious expectations set when the joint venture was formed. The conclusion of federal EV tax credits has also slowed momentum, reducing immediate incentives for buyers and impacting projected production volumes.
Industry Investments vs. Market Reality
When the joint venture was announced in 2021, automakers and battery makers were racing to scale up EV production. The U.S. government and private companies poured billions into factories, research, and supply chains, anticipating a massive surge in EV demand. Today, the gap between these investments and actual sales highlights the unpredictable pace of market adoption.
Ford’s Strategic Focus on Kentucky Plants
Ford’s move to take control of the Kentucky factories signals a commitment to its EV roadmap despite market fluctuations. These plants are expected to continue producing batteries for the F-Series electric trucks, which remain central to Ford’s EV strategy. The company now has more direct control over operations, production timelines, and innovation at these sites.
SK On’s Role in Tennessee
SK On’s continued operation at the Tennessee campus suggests a more specialized partnership model. The company will focus on refining battery production and technology at this single location while maintaining collaboration with Ford. Industry analysts view this as a strategic pivot, allowing SK On to optimize resources without being tied to a broad joint venture structure.
Implications for the U.S. EV Supply Chain
The dissolution of the Ford-SK On joint venture has broader implications for the U.S. EV supply chain. The split could influence partnerships, investments, and future factory expansions across the country. Both companies remain committed to battery innovation, but their independent operations may accelerate competition and innovation differently than a joint venture would have.
Market Reactions and Investor Sentiment
Investors are closely watching how this move will affect both companies. Ford’s direct control of its Kentucky plants could be viewed positively, suggesting stronger oversight and efficiency. For SK On, focusing on a single facility could enhance operational specialization. However, the news also underscores the challenges automakers face in scaling EV production amid fluctuating demand.
Lessons from EV Industry Trends
The Ford-SK On split highlights key lessons in the EV sector: aggressive investment strategies must align with realistic market forecasts, and flexible partnership models may be more sustainable than multi-billion-dollar joint ventures. Companies are learning to balance long-term innovation goals with short-term market realities.
EV Growth in the U.S.
Despite the joint venture ending, U.S. EV production continues to expand. Ford’s Kentucky plants and SK On’s Tennessee operations remain operational, supporting the broader push toward electrification. The move may even create new opportunities for collaborations, innovations, and independent growth strategies for both players.
A Shift, Not a Setback
While the end of the joint venture may seem like a setback, it reflects the evolving landscape of EV manufacturing. Both Ford and SK On remain committed to electric mobility, but their approach is now more focused and adaptable. The split underscores the ongoing challenges and opportunities in the U.S. EV market, signaling a period of strategic recalibration rather than decline.
