Ford Motor is scaling back its electric vehicle (EV) ambitions by allowing Nissan to use part of one of its Kentucky battery plants, which underscores the auto industry’s broader struggles with sluggish EV demand and rising costs, according to people familiar with the plan.
According to an exclusive Wall Street Journal report, the decision affects one of two battery plants Ford launched in 2021 as part of a $7 billion EV investment with South Korea’s SK On. Today, one of the Kentucky factories sits idle, while the other is only partially operational, and it is now expected to produce batteries for both Ford and Nissan.
The shift marks the latest retreat for Ford, which projected a $5 billion loss in its EV unit this year after a $5 billion loss in 2024. Earlier this month, the automaker suspended its full-year financial guidance, citing uncertainty around potential tariffs on imported EV components.
For Nissan, access to a U.S.-based battery plant offers a lifeline as the company faces its own financial pressure, reporting a $4.5 billion loss in the first quarter and announcing plans to lay off 20,000 workers. Producing batteries domestically helps Nissan mitigate tariffs on imported parts and vehicles. The company previously canceled a planned battery facility in Japan and announced in March that SK On would supply batteries for its future electric SUVs to be built at its Canton, Mississippi, plant.
The battery production deal, though not officially confirmed by Ford, Nissan, or SK On, represents a cost-saving opportunity for both automakers. Ford redirected questions to the BlueOval SK joint venture, while representatives from Nissan and SK On declined to provide details on the Kentucky site’s role in the partnership.
While the Ford-SK On venture received a $9.63 billion loan from the U.S. Department of Energy to support construction of the Kentucky and Tennessee plants, which were expected to generate more than 12,000 jobs. Ford said plans for the Tennessee site remain unchanged.
The broader EV market has cooled in recent months. In April, EV sales fell 5% despite gains in the overall auto market. General Motors recently exited a battery plant project in Michigan, and Honda said this week it would slash over $20 billion in EV spending, delaying a Canadian factory.
As carmakers recalibrate, industry analysts say more partnerships like the one forming between Ford and Nissan could emerge, driven by financial pressure and shifting consumer demand.
