South Korean battery maker SK On will end its US joint venture with Ford Motor as they refocus strategies in a cooling electric vehicle market.
Under the change, each company will take independent control of parts of their jointly developed production facilities.
Ford subsidiary will assume full ownership of the battery plants in Kentucky, while SK On will take over and operate the facility in Tennessee.
The companies currently collaborate through their 2022 joint venture, BlueOval SK, which was launched alongside a commitment to invest $11.4bn in US battery manufacturing.
The separation is expected to be completed by the first quarter of 2026, subject to regulatory approval.
Both firms indicated that employee-related matters will be handled as part of the transition, though no specific details were provided.
SK On noted that the timeline for starting production at the Tennessee plant is not yet fixed. “The production start schedule for the Tennessee plant remains flexible at this time, as it is related to the ownership transition,” the company said.
The move comes as SK On, a subsidiary of SK Innovation, adjusts its business strategy against the backdrop of weaker electric vehicle demand and mounting financial pressure. The company has flagged the decision as part of a broader effort to strengthen its balance sheet and focus on improving profitability.
The new arrangement is intended to streamline SK On’s operations. The agreement will allow the company to “improve its operational efficiency” and “respond more effectively to evolving market dynamics and diverse customer needs,” according to its statement.
Looking ahead, SK On said it “plans to focus on profitable and sustainable growth in the US by supplying electric vehicle batteries to Ford and various customers, as well as energy storage systems, from its Tennessee plant.”
US automaker Ford has also been cautious on EV market trends. In September, CEO Jim Farley warned that sales of electric cars could decline by about 50% following the 30 September expiry of a $7,500 federal tax credit for buyers.
Beyond Ford, SK On supplies batteries to Hyundai Motor, Kia, Volkswagen, Nissan and US EV startup Slate.
