On the Dash:
- Ford is scaling back its EV strategy, terminating a $6.5 billion battery deal and canceling multiple EV models amid shifting demand and policy conditions.
- Battery suppliers are feeling the impact, with both LG Energy Solution and SK On exiting major Ford-related projects.
- Long-term EV investments are under review, signaling continued uncertainty for manufacturers, suppliers and dealers planning for electrification.
South Korea’s LG Energy Solution said Wednesday that Ford has terminated an electric vehicle battery supply agreement valued at about 9.6 trillion won ($6.50 billion), marking another major setback in the automaker’s electric vehicle strategy.
LG Energy Solution said in a regulatory filing that Ford issued a termination notice after deciding to halt production of some EV models, citing policy changes and a shifting outlook for EV demand.
The battery maker had signed two contracts last October to supply EV batteries to Ford in Europe, with production scheduled to begin in 2026 and 2027. The cancellation underscores growing uncertainty around long-term EV investments as automakers reassess demand forecasts and regulatory conditions.
Ford’s decision follows a broader restructuring of its EV business. On Monday, the automaker said it will take a $19.5 billion writedown and cancel several electric vehicle models, representing one of the most significant examples yet of the industry’s retreat from battery-powered vehicles. The move comes as the Trump administration’s policies and softer consumer demand weigh on EV profitability.
The termination of the LG Energy Solution deal is not an isolated case. Last week, South Korean battery maker SK On said it decided to end its joint venture with Ford for battery factories in the United States. In 2022, Ford and SK On invested $11.4 billion to build the joint battery plants.
Together, the developments highlight mounting pressure across the EV supply chain, as automakers and battery manufacturers scale back or delay investments made during earlier periods of aggressive electrification plans.
