Fewer EVs need fewer batteries: Ford and SK On end their joint venture

Reflecting on the electric vehicle (EV) boom of 2021, a time when the market was driven by soaring valuations and ambitious climate initiatives, the landscape has drastically changed. Back then, automakers were enthusiastic about an all-electric future, forming alliances with battery suppliers to support their vision. Ford, for instance, announced a significant joint venture with SK On to create two battery manufacturing plants in Kentucky and Tennessee, an investment totaling $11.4 billion aimed at generating 11,000 jobs and producing 60 GWh of battery capacity annually. Fast forward to today, and the situation is markedly different. The once-promising EV subsidies have vanished, and the current administration has shown little interest in regulating the production of gas-powered vehicles. As a result, many automakers are revising their strategies, scaling back on ambitious electric plans while returning to combustion engine designs. This shift is evidenced by the recent announcement that Ford and SK On will dissolve their battery factory joint venture. This decision did not come as a surprise to industry analysts, as Ford had already begun to reduce its electric vehicle ambitions earlier this year, discarding multiple EV strategies in response to disappointing sales figures for the F-150 Lightning. Instead of pursuing a fully electric model, the company is now prioritizing a more affordable midsize electric truck slated for release in 2027. As for the two battery plants, a subsidiary of Ford will take over full control of the facility in Kentucky, while SK On will manage the Tennessee plant independently. Reports indicate that SK On's decision to exit the partnership is largely due to the bleak outlook for EV sales in the U.S., leading it to pivot its focus towards the energy storage sector for the Tennessee plant's production.