South Korean battery maker SK On is dissolving its joint venture with Ford Motor, splitting ownership of three U.S. battery plants as slowing EV demand reshapes the industry.
Why it matters: The breakup marks the collapse of one of America’s largest EV battery partnerships, a direct casualty of the post-subsidy market downturn.
The Details
- SK On and Ford will independently own and operate the BlueOval SK facilities, effective by end of Q1 2026.
- A Ford subsidiary takes full ownership of two Kentucky plants; SK On assumes control of the Tennessee facility.
- SK On is pivoting the 45 GWh Tennessee plant toward energy storage systems (ESS) and broader customer sales.
- “The production start schedule for the Tennessee plant remains flexible at this time, as it is related to the ownership transition,” SK On said, according to Reuters.
- The restructuring aims to reduce SK On’s debt and fixed costs amid mounting losses.
By The Numbers
- Original investment (2022): $11.4 billion
- SK On Q3 2025 operating loss: 124.8 billion won ($84.72 million)
- SK On Q2 2025 loss: 66.4 billion won (Q3 nearly doubled)
- Tennessee plant capacity: 45 GWh
- SK On U.S. standalone capacity (post-split): 67 GWh (up from 22 GWh)
- Deal closing target: End of Q1 2026
EVXL’s Take
This split was inevitable. EVXL reported in August that BlueOval SK was already hunting for outside customers as F-150 Lightning sales cratered and the September 30 tax credit expiration loomed. Ford CEO Jim Farley himself predicted EV sales could drop 50% without the $7,500 incentive. That prediction is now playing out in corporate restructuring.
The pivot to energy storage is telling. Korean battery makers are fleeing the EV market for data center power systems, where demand is surging. SK On, LG Energy Solution, and Samsung SDI are all repurposing production lines. The $11.4 billion bet on American EV demand is now a cautionary tale of subsidy-dependent industrial policy.
Frequently Asked Questions
- Why are SK On and Ford splitting up? Slowing EV demand and the end of U.S. tax credits have made the partnership financially unsustainable. SK On is pivoting to energy storage systems.
- What happens to the battery plants? Ford keeps the two Kentucky facilities. SK On takes full control of the Tennessee plant.
- When does the split take effect? The companies expect to finalize the agreement by the end of Q1 2026, pending regulatory approvals.
