Ford and SK On End Major EV Battery Joint Venture, Split U.S. Factories

Ford Motor Company and South Korean battery maker SK On have dissolved their high-profile joint venture. The decision was confirmed by SK On on Thursday. The move ends a four-year partnership to build electric vehicle battery plants in the United States.The two companies will now split the assets. This restructuring comes amid a broader slowdown in electric vehicle sales growth. The original deal represented an $11.4 billion investment.

A Strategic Split of Multi-Billion Dollar Assets

The joint venture, BlueOval SK, is now being unwound. According to Bloomberg, the companies have reached a clear division agreement. Ford will assume full ownership and operation of the two battery plants in Kentucky.SK On will take over the operation of the factory in Tennessee. That facility is part of the massive BlueOval City campus. The companies emphasized they will maintain a strategic partnership focused on the Tennessee site.The original 2021 deal was a landmark moment. It aimed to secure battery supply for Ford’s next-generation electric trucks. The market outlook for EVs was vastly different at that time.

Industry Reckoning Follows Slower EV Demand

This dissolution reflects a major pivot for the auto industry. Billions were committed to ramp up EV production capacity. Demand has not met the aggressive projections made just a few years ago.Factors like the end of the federal EV tax credit have cooled the market. Automakers are now recalibrating their strategies. Ford, like its rivals, is balancing its electric ambitions with current market realities.The separation allows both companies more flexibility. Ford gains direct control over key battery production in Kentucky. SK On can focus its efforts and capital on the Tennessee operation.

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This strategic split underscores a new phase for the electric vehicle industry. The focus is shifting from rapid expansion to operational efficiency. The end of the Ford-SK On joint venture marks a significant turn in the EV battery race.

Info at your fingertips

What was the BlueOval SK joint venture?

It was a partnership formed in 2021 between Ford and SK On. The goal was to spend $11.4 billion building three battery plants in Tennessee and Kentucky. The venture was created to supply batteries for Ford’s electric F-Series trucks.

Who owns the factories now?

The assets have been divided. Ford now owns and will operate the twin battery plants located in Kentucky. SK On will own and operate the single battery plant at the BlueOval City campus in Tennessee.

Why did the partnership end?

The decision comes as the electric vehicle market cools. Industry-wide demand has not kept pace with earlier, more optimistic projections. Companies are restructuring investments to match the current sales environment.

Are Ford and SK On still working together?

Yes. Both companies stated they will maintain a strategic partnership. This ongoing collaboration will be centered on the battery plant located in Tennessee.

How much money was invested originally?

The total planned investment for the three-factory project was $11.4 billion. This huge commitment was announced at the peak of industry enthusiasm for electric vehicles.

What does this mean for Ford’s EV plans?

Ford continues its electric vehicle strategy but with adjusted tactics. Gaining direct control of the Kentucky plants may offer more flexibility. The company is responding to real-time market conditions.