Ford and SK On Divide $11.4B US Battery Venture, Share Factory Assets
Ford and SK On are parting ways in a significant shift for the electric vehicle battery landscape. The companies have decided to dissolve their “BlueOval SK” joint venture, ending their collaboration that began in 2021.
Details of the Split
The split involves a notable financial investment. Initially, Ford and SK On allocated $11.4 billion to establish three battery gigafactories across the United States. This investment was heralded as the largest manufacturing effort in Ford’s long history.
- Two factories were planned for Kentucky.
- One factory was slated for Tennessee.
As part of the division, Ford will retain full ownership of the two Kentucky plants. One of these facilities has commenced initial production. The second site remains under development.
Conversely, SK On will take control of the BlueOval City battery plant in Tennessee. This decision allows SK On to diversify its customer base, as they aim to supply batteries to various entities beyond just Ford.
Impact on the Market
SK On’s ability to market batteries for both electric vehicles (EVs) and energy storage systems reflects a strategic pivot. The company seeks to tap into the growing energy storage market, which is currently booming. Meanwhile, Ford’s fluctuating EV production volumes raise concerns about its original battery capacity needs.
The transition is expected to finalize by the first quarter of 2026 and comes at a time of uncertain EV demand among traditional automakers. The political climate in the U.S. has shifted, with changes in federal incentives impacting the industry.
Future Implications
This restructuring raises questions about Ford’s commitment to its EV targets. The dissolution of the joint venture highlights potential difficulties in meeting production goals initially set. Analysts suggest this shift may benefit SK On, providing them with opportunities to sell battery capacity to other major automotive manufacturers and the lucrative energy market.
The future of both entities now hinges on their ability to adapt to the evolving demands of the automotive and energy landscapes.
