Ford and SK On End US Battery Joint Venture

Ford and SK On Dissolve Battery Joint Venture

In 2020, Ford Motor Company and SK On, a South Korean battery manufacturer, established a collaborative venture. This agreement involved an $11.4 billion investment for the construction of battery production facilities in both Tennessee and Kentucky.

Despite the continued operation of these facilities, the joint venture itself is being dissolved.

Asset Division and Future Operations

SK On, a component of SK Innovation, announced on Thursday a mutual agreement with Ford to terminate the joint venture. The companies will redistribute the assets accordingly.

Ford will assume full ownership and operational control of the two battery plants located in Kentucky. Conversely, SK On will continue to manage the factory situated within the expansive BlueOval SK complex in Tennessee.

According to reports from Bloomberg, SK On intends to maintain a strategic alliance with Ford, focusing specifically on the Tennessee plant.

Ford's Response

A Ford representative confirmed the company’s awareness of SK On’s announcement to TechCrunch. However, no additional statements were provided at this time.

Industry Context and Market Dynamics

The initial formation of the joint venture coincided with substantial industry-wide investments aimed at accelerating electric vehicle (EV) production.

Although EV sales have experienced growth in recent years, the actual demand has not aligned with the industry’s initial, ambitious forecasts.

Furthermore, the expiration of the federal EV tax credit has contributed to a slowdown in the rate of sales.

This shift in market conditions appears to have influenced the decision to restructure the partnership.