South Korean battery manufacturer SK On, a subsidiary of SK Innovation, has announced the termination of its U.S. joint venture with Ford Motor. The move reflects a strategic pivot by SK On to focus on energy storage systems (ESS) and adapt to changing market conditions, including slowing electric vehicle (EV) demand and the expiration of U.S. EV tax incentives.
Joint Venture Split Details
The joint venture, established in 2022 with an investment of $11.4 billion, was initially aimed at building EV battery plants in the United States. Under the restructuring:
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Ford Motor will take full ownership of the Kentucky battery plants.
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SK On will assume sole ownership of the Tennessee plant, though the production timeline for Tennessee remains flexible.
The split allows both companies to focus on their core objectives, with Ford concentrating on EV production and SK On expanding its energy storage business.
Strategic Rationale Behind the Move
SK On cited several reasons for ending the joint venture, including:
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Accelerating North American energy storage system (ESS) business.
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Improving productivity and operational efficiency.
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Reducing fixed costs and debt exposure.
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Enhancing profitability amid declining EV battery shipments.
The company reported an operating loss of 124.8 billion won ($84.72 million) in Q3 2025, nearly doubling the previous quarter’s loss due to weaker EV battery sales.
Industry-Wide Implications
The move reflects a broader trend among South Korean battery manufacturers, such as LG Energy Solution and Samsung SDI, shifting production focus from automotive EV batteries to energy storage solutions for commercial and industrial applications, including data centers.
With U.S. EV tax credits expiring, automakers like Ford are adjusting their production strategies, while battery suppliers seek diversified revenue streams to maintain growth and profitability.
Outlook for the EV Battery Market
The end of the SK On–Ford joint venture underscores the dynamic nature of the EV battery industry, where companies are increasingly balancing EV production with sustainable energy storage initiatives. SK On’s strategic pivot positions it to capitalize on the growing demand for stationary energy storage solutions, while Ford focuses on advancing EV manufacturing in the United States.
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