South Korean battery maker SK On Co. and U.S. automaker Ford Motor Co. announced this week that they will dissolve their joint U.S. electric vehicle (EV) battery manufacturing venture, BlueOval SK, as part of a major restructuring of their partnership. The move reflects a strategic shift as both companies respond to changing market conditions and declining EV demand in North America.
The joint venture, launched in 2022 with an $11.4 billion investment to build battery plants in Kentucky and Tennessee, will be unwound with Ford taking full ownership of the Kentucky facilities and SK On assuming full control of the Tennessee plant.
SK On said the decision allows it to sharpen its focus on emerging growth areas such as energy storage systems (ESS) while reallocating capital more efficiently. The company has been facing pressure from slowing EV sales and the expiration of U.S. federal EV tax incentives, which industry analysts say has reduced demand for new EV battery capacity.
Ford, for its part, will operate the Kentucky battery facilities independently, supporting its ongoing EV production plans. Officials did not disclose detailed future output targets but have indicated that the move is aimed at maintaining flexibility and improving operational efficiency across their North American operations.
The dissolution also highlights broader challenges in the EV supply chain, with several battery makers adjusting strategies as subsidies and market growth fluctuate. Other South Korean firms, including LG Energy Solution and Samsung SDI, are also pivoting production lines toward energy storage applications amid shifting demand.
Industry watchers say the end of BlueOval SK underscores the difficulties of large-scale EV infrastructure projects in the current climate, as manufacturers strive to balance investment costs, market timing and evolving government policy on EV incentives and clean energy.
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