SK On ends Ford EV battery joint venture

South Korean battery maker SK On said on May 21 it ended its joint venture with Ford in the US, taking sole control of its Tennessee EV battery plant.

Ford separately owns and runs two plants in Kentucky after the partners moved to unwind the 2022 tie-up amid weaker EV demand.

SK On said it renamed the former BlueOval SK Tennessee site to SK On Tennessee and completed the restructuring five months after announcing the breakup.

SK On said the change will cut its debt by about 5.4 trillion won, or US$3.6 billion, and save about US$180 million in yearly interest costs.

It also said it will reduce annual depreciation linked to the Kentucky plants by about 330 billion won (US$218 million).

The move comes as slowing EV sales and US policy uncertainty pressure battery makers, and after SK On cut 968 jobs at its Georgia plant in March.

🔗 Source: Yonhap

🧠 Food for thought

Implications, context, and why it matters.

Ford shifts Kentucky battery plants to energy storage

Ford is moving its two Kentucky battery plants away from electric-vehicle batteries and toward stationary energy storage systems 1.
The business will operate as “Ford Energy” with a target of 20 gigawatt-hours (GWh) a year, a measure of battery output capacity 2.
The change came after about 1,500 layoffs at the Kentucky site. It also fits Ford’s plan to delay its next electric truck so it can use cheaper battery technology 1, 3.
Ford is cutting the share of annual capital spending for pure EVs to about 30% from 40%. The money will shift toward hybrids and other programs 3.

Breakup adds pressure to the US battery supply chain

The end of the SK On-Ford venture fits a wider move by carmakers to step back from joint ventures. They want more control over battery sourcing and production, while lining up with government incentives 4, 3.
The US Inflation Reduction Act (IRA), a 2022 law with clean energy manufacturing subsidies, offers strong incentives. Its Advanced Manufacturing Production Credit pays US$35 per kilogram for cathode active material, a battery ingredient, made in the US 2.
Ford’s Kentucky plan also marks a shift toward different battery chemistries, or formulas built for different uses 1.
The fast-growing energy storage market largely favors lower-cost lithium iron phosphate (LFP) batteries. They differ from the high-nickel batteries often used in longer-range EVs, giving Ford room to serve two expanding markets 2.