Ford and South Korea’s SK On are seeking buyers for excess batteries from their new joint-venture factory in Kentucky as US EV demand slows.

The plant, which began production this week, was initially intended to supply Ford’s F-150 Lightning pickup but now aims to serve additional customers, including energy storage firms and other EV makers.

Ford’s F-150 Lightning sales fell 26% in Q2, prompting Ford to scale back EV plans by pausing another Kentucky battery plant and delaying its next electric F-series truck to 2028.

The joint venture, launched in 2021, secured a US$9.2 billion loan from the US Department of Energy, but the Kentucky factory will hire 1,450 workers instead of the 2,500 originally planned.

Ford is also shifting its EV strategy to focus on cheaper models using lithium iron phosphate batteries to be produced at a separate Michigan facility starting next year.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ EV tax credit elimination amplifies automaker struggles beyond Ford

Ford’s excess battery supply problem reflects a broader industry challenge as the $7,500 federal EV tax credit ends September 30th under President Trump’s fiscal package1.

Research shows eliminating this credit could reduce EV sales share by 6 percentage points by 2030, with some studies projecting a 27% overall drop in EV sales23.

Ford already lost $2.5 billion on EVs in the first half of 2024, while F-150 Lightning sales of just 15,645 units in that same period demonstrate the scale of demand shortfall4.

The timing creates a compounding effect where automakers face both weakening organic demand and the removal of key purchase incentives that supported early EV adoption.

This policy shift particularly impacts companies like Ford that invested heavily in domestic battery production, as the tax credit was specifically designed to support U.S. supply chains for EV components rather than just vehicle sales3.

2️⃣ Battery factory overcapacity reveals industry-wide demand miscalculation

Ford and SK On’s struggle to utilize their new Kentucky battery factory reflects a systematic industry error in forecasting EV adoption rates.

The facility opened with 1,450 workers instead of the originally planned 2,500, while Ford delayed its second Kentucky battery plant and pushed back its Tennessee manufacturing complex to 20271.