SK On and Ford split US battery venture

South Korean battery manufacturer SK On and Ford Motor have agreed to unwind their BlueOval SK joint venture in the United States, ending a partnership launched in 2022 to build large-scale battery manufacturing capacity for electric vehicles. As Korean media reports, the three battery plants developed under the BlueOval SK banner will be split between the two companies, with ownership and operations separated.

SK On will assume full ownership of the battery plant under construction in Tennessee, located within Ford’s BlueOval City campus, while Ford will take over the two plants in Kentucky through a wholly owned subsidiary. The latter only officially opened its doors in August, while a second plant in the US state is still under development. The Tennessee plant was also supposed to be completed this year; however, production there has yet to start.

The companies aim to complete their parting by the end of the first quarter of 2026, subject to regulatory approvals and customary closing conditions.

Once the transfer is finalised, the Tennessee site will become SK On’s second wholly owned battery factory in the US, alongside SK Battery America in Commerce, Georgia. As a result, SK On’s standalone battery production capacity in the US is expected to rise from 22 gigawatt-hours to 67 gigawatt-hours annually. The company’s only remaining US joint venture will be its battery project with Hyundai Motor Group in Georgia.

Despite the dissolution of the joint venture, SK On and Ford are expected to continue their supplier relationship, with the Tennessee plant set to provide batteries for Ford’s next-generation electric vehicles under existing agreements.

The BlueOval SK project was originally announced as an investment of around $11 billion, with a combined planned capacity of up to 120 gigawatt-hours per year, sufficient to supply batteries for more than one million electric vehicles annually. However, timelines for the Tennessee plant and the second Kentucky facility had been pushed back. In 2023, Ford announced that it would postpone its investment in the second Kentucky plant and thus the start of construction. The reason: weaker-than-anticipated demand for EVs across the US. For that same reason, Ford agreed to let competitor Nissan use its battery production in Kentucky earlier this year.

SK On currently focuses on nickel-cobalt-manganese battery chemistries for electric vehicles and supplies cells to several automakers, including Hyundai Motor Group, Kia, Volkswagen, Nissan and US EV startup Slate. According to The Korea Harald, the company has also signalled that the Tennessee plant could support energy storage system production, reflecting rising demand for grid-scale storage in the US.

A spokesperson told The Korea Harald: “With our 45-gigawatt-hour Tennessee plant, we aim to supply batteries for both electric vehicles and energy storage systems not only to Ford but to a wider range of customers, strengthening profitability and operational resilience in the North American market.”

Ford published what is probably the shortest company statement ever: “We are aware of SK’s disclosure and we have nothing further to share at this time.”

koreajoongangdaily.joins.com, koreaherald.com,fromtheroad.ford.com