South Korean battery manufacturer SK On said on Thursday it will dissolve its U.S. joint venture with Ford Motor Company, marking a significant realignment of one of the country’s largest EV battery partnerships. The move comes as weakening electric-vehicle demand and the expiration of federal subsidies prompt Korean suppliers to reassess their U.S. strategies and accelerate expansion into the energy storage systems (ESS) sector.
Under the restructuring, a Ford subsidiary will assume full ownership of the two joint battery plants in Kentucky, while SK On will take complete control of the Tennessee facility. “The production start schedule for the Tennessee plant remains flexible at this time, as it is related to the ownership transition,” the company said.
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SK On and Ford jointly committed $11.4 billion to the U.S. battery complex in 2022. The company said the decision to unwind the partnership reflects a broader overhaul of assets and capacity, enabling SK On to respond more quickly to fluctuating market conditions, expand its North American ESS business, and improve cost competitiveness across its battery operations.
The restructuring is expected to strengthen the company’s financial position by significantly reducing debt and lowering fixed costs. SK On reported an operating loss of 124.8 billion won ($84.7 million) for the July–September quarter, nearly double the previous quarter’s loss amid softer EV battery shipments.
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Ford CEO Jim Farley warned in September that U.S. electric vehicle sales could decline by about 50% following the September 30 expiration of the $7,500 EV purchase tax credit, a change that has pressured demand.
With EV shipments slowing, SK On has been expanding into energy storage systems. In September, the company signed a supply agreement with U.S.-based Flatiron Energy Development to provide lithium iron phosphate (LFP) batteries for ESS applications. Other major Korean battery makers, including LG Energy Solution and Samsung SDI, are similarly converting EV battery lines to ESS production as U.S. subsidies phase out.
See also: SK On Sees Solid-State Battery Edge as Potential ‘Weapon’ Against China in EV Tech Race
Energy storage batteries share similar chemistries with automotive cells and are used to power facilities such as data centres, an area expected to see strong growth amid increasing electricity demand.
