TLDRs;
- Ford fully owns Kentucky plant, securing battery supply for its electric vehicles.
- SK On gains Tennessee facility, enabling independent operations and supplier partnerships.
- Joint venture breakup allows each company to streamline production and reduce complexity.
- Suppliers and construction firms gain new opportunities from independent battery plant operations.
South Korea’s SK On and U.S. automaker Ford Motor have officially agreed to dissolve their joint battery venture in the United States, marking a significant realignment in the EV supply chain. The announcement, made on December 11, follows a US$11.4 billion investment in 2022 to establish battery plants across Kentucky and Tennessee. Under the new structure, Ford will take full ownership of the Kentucky facility, while SK On assumes control of the Tennessee plant.
The split allows each company to operate independently, offering greater strategic flexibility amid evolving EV market conditions.
Ford Secures Kentucky Battery Supply
Ford’s acquisition of the Kentucky plant secures more than 80 gigawatt-hours of production capacity, supporting vehicles such as the F-150 Lightning and E-Transit. The move comes as Ford seeks to stabilize costs following last year’s reported $5.1 billion losses in its EV division. By fully managing the Kentucky site, Ford can streamline operations and align production with its next-generation electric F-Series rollout, now scheduled for mid-2028.
The company is also pivoting toward lithium iron phosphate battery technology at its Michigan facility in partnership with Contemporary Amperex Technology Co. Limited (CATL). This approach promises lower costs and a more predictable supply chain for key U.S. operations.
SK On Gains Tennessee Autonomy
SK On’s full ownership of the Tennessee plant provides the company operational freedom and greater control over its production timeline, now projected for 2027. The separation from Ford also enables SK On to forge direct supplier relationships, particularly for nickel, manganese, and cobalt materials.
The company has established a lithium offtake agreement with ExxonMobil, ensuring secure U.S. supply for its battery production. Additionally, SK On’s Tennessee operations are set to create opportunities for construction, facility management, and sustainable technology providers.
The company’s focus on carbon-cutting innovations, highlighted at CES 2024, further strengthens its position in the U.S. clean energy sector.
Breakup Opens Supplier Opportunities
With procurement now handled separately, suppliers of battery equipment and materials can directly engage with SK On’s Tennessee facility without navigating Ford’s operational filters. Likewise, the Kentucky plant continues to serve external customers, including Japanese automaker Nissan, formalizing arrangements that were explored earlier this year.
This restructuring signals a broader trend in the EV sector, companies are seeking greater operational clarity while maintaining the flexibility to serve external clients. For suppliers and construction firms, the split opens fresh avenues for contracts and partnerships, particularly in the expanding green energy and battery technology space.
Implications for U.S. EV Market
The SK On–Ford separation reflects broader dynamics in the global EV industry. Automakers and battery producers are navigating fluctuating demand, cost pressures, and the transition to next-generation battery chemistries. By managing their respective facilities independently, both SK On and Ford aim to reduce complexity, secure domestic supply, and pursue strategic growth without shared constraints.
Analysts note that these moves could influence EV production timelines, supplier relationships, and the competitive landscape in North America. For the U.S., the split reinforces the country’s position as a growing hub for battery manufacturing while fostering partnerships with local and international suppliers.
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