On the Dash:
- SK On and Ford are splitting U.S. battery plants; Ford takes Kentucky, SK On takes Tennessee.
- SK On shifts focus to energy storage to offset weaker EV demand.
- The restructuring aims to improve profitability by reducing debt and cutting fixed costs.
South Korean battery maker SK On announced it will end its joint venture with Ford Motor for U.S. battery production as part of a business overhaul. Ford will take full ownership of the Kentucky battery plants, while SK On will assume control of the Tennessee facility. The move allows each company to focus on its strategic priorities, with SK On accelerating expansion into energy storage systems.
The split comes amid slowing U.S. electric vehicle demand and the expiration of the $7,500 federal EV tax credit on September 30. South Korean battery makers are adjusting U.S. strategies as incentives decline. SK On reported an operating loss of 124.8 billion won ($84.72 million) for July-September, nearly double the previous quarter’s 66.4 billion won loss, reflecting declining EV battery shipments.
SK On said the restructuring will improve financial performance by reducing debt, cutting fixed costs, and increasing productivity. The company has been actively expanding into energy storage, signing a September deal with Flatiron Energy Development to supply lithium-iron phosphate batteries for U.S. storage projects. These batteries, similar in chemistry to automotive cells, power facilities including data centers.
Ford and SK On initially invested $11.4 billion in 2022 to develop their joint battery plants. The Tennessee plant’s production schedule remains flexible due to the ongoing ownership transition. Other South Korean battery makers, including LG Energy Solution and Samsung SDI, are also converting EV battery lines to energy storage production amid the phasing out of U.S. subsidies.
The realignment reflects growing challenges in the EV market. Ford has warned that electric-car sales could fall by about 50% after federal incentives expire. SK On’s pivot toward energy storage positions the company for more stable growth and allows Ford to consolidate battery production in line with its EV strategy.
($1 = 1,473.0200 won)
