Ford Motor Company and South Korean battery manufacturer SK On have officially announced the termination of their U.S.-based battery joint venture, BlueOval SK. The dissolution of the partnership marks a significant shift in the operational strategy for both companies as the automotive industry continues to recalibrate expectations for electric vehicle (EV) adoption in North America. The decision, reported by Reuters on Thursday, ends a multi-billion-dollar collaboration that was previously poised to be a cornerstone of the United States’ domestic battery manufacturing infrastructure.
The termination of the joint venture comes approximately three years after the two companies first formalized their agreement in 2022. Originally, the BlueOval SK initiative aimed to invest $11.4 billion to construct three large-scale battery manufacturing facilities: two in Glendale, Kentucky, and one in Stanton, Tennessee, at Ford’s BlueOval City campus. The projected combined capacity of these plants was estimated at 129 gigawatt-hours (GWh) annually, intended to supply batteries for Ford’s next generation of electric trucks and SUVs. However, shifting market dynamics and a slower-than-anticipated growth in EV demand have prompted a strategic reassessment.
According to the report, the unwinding of the joint venture will result in a restructuring of asset ownership between the two entities. While specific financial terms of the separation remain confidential, the framework of the dissolution involves Ford taking full control of the manufacturing infrastructure at the BlueOval City site in Tennessee. Conversely, SK On is expected to retain ownership and operational control of the facilities at the BlueOval SK Battery Park in Kentucky. This division allows each company to pursue independent manufacturing and supply strategies without the complexities of a shared governance structure.
The decision to end the partnership is attributed to the cooling trajectory of the electric vehicle market in the United States. While sales of EVs continue to grow, the rate of adoption has slowed significantly compared to the aggressive forecasts made earlier in the decade. Ford, in particular, has pivoted its strategy throughout late 2024 and 2025 to place a heavier emphasis on hybrid electric vehicles (HEVs) and commercially focused electric units, rather than the broad consumer EV portfolio initially envisioned. This shift has reduced the immediate necessity for the massive, simultaneous battery capacity that the joint venture was designed to deliver.
For Ford, assuming sole control of the Tennessee battery operations aligns with the company’s vertically integrated manufacturing goals for its forthcoming electric truck platform, known internally as “Project T3.” By bringing the Tennessee battery plant in-house, Ford gains direct oversight over supply chain costs and production pacing, allowing the automaker to scale output in direct correlation with vehicle demand. This move mirrors strategies seen elsewhere in the industry, where automakers are seeking to minimize exposure to long-term take-or-pay contracts by managing their own component production.
On the other side of the split, SK On’s retention of the Kentucky facilities allows the South Korean firm to diversify its customer base. Under the joint venture, the capacity of the Kentucky plants was exclusively dedicated to Ford. As an independent operator, SK On will now have the latitude to negotiate supply agreements with other original equipment manufacturers (OEMs) operating in North America. This flexibility is critical for SK On as it seeks to improve profitability and utilize its production capacity more efficiently in a fluctuating market.
The dissolution of BlueOval SK also raises questions regarding federal funding. In June 2023, the U.S. Department of Energy’s Loan Programs Office announced a conditional commitment for a loan of up to $9.2 billion to BlueOval SK to finance the construction of the three battery plants. This loan was set to be the largest ever awarded for an automotive manufacturing project in U.S. history. With the joint venture entity ceasing to exist, the status of this loan commitment will likely require renegotiation or re-application by the individual companies for their respective sites. Neither Ford nor the Department of Energy has issued a detailed comment on the updated status of this financing.
The labor implications of the split are also a focal point. The original joint venture promised the creation of approximately 7,500 jobs across the Kentucky and Tennessee sites. Both Ford and SK On have stated that hiring plans remain active, though the timeline for staffing may be adjusted. Ford has reiterated its commitment to the Tennessee campus, which also houses a vehicle assembly plant, stating that the integration of the battery facility will streamline operations. SK On has indicated that it will proceed with the commissioning of the Kentucky plants, although the production ramp-up may be staggered to match secured orders from new customers.
This development occurs against a backdrop of broader industry retraction. Several major automakers have delayed or canceled battery plant projects in recent months. General Motors and LG Energy Solution, for example, have paused expansion plans on certain joint sites, and other European manufacturers have scaled back North American battery investments. The initial rush to secure gigawatt-hour capacity has given way to a period of capital discipline, as automakers prioritize profitability and cash flow over market share expansion in the EV sector.
Ford’s “Model e” division, responsible for its electric vehicle operations, has reported substantial operating losses in recent quarters. CEO Jim Farley has emphasized the need to reduce the cost of goods sold and to achieve price parity with internal combustion engine vehicles. The dissolution of the joint venture appears to be a step toward reducing fixed costs and administrative overhead. By decoupling from SK On, Ford removes the obligation to fund its share of the joint venture’s capital expenditures, potentially freeing up cash for other product development initiatives.
The technical specifications of the batteries produced at the respective plants are expected to remain largely unchanged in the immediate term. The facilities were designed to produce advanced nickel-cobalt-manganese (NCM) pouch-style cells. However, with Ford controlling the Tennessee site, the automaker may have more freedom to experiment with different cell chemistries, such as lithium iron phosphate (LFP), which it has expressed interest in for lower-cost vehicle trims. SK On, maintaining the Kentucky site, will likely continue to specialize in high-nickel chemistries favored for long-range performance applications.
The geopolitical context of the split is also relevant. The U.S. Inflation Reduction Act (IRA) provides tax credits for battery manufacturing and EV purchases, contingent on domestic sourcing requirements. Both Ford and SK On remain eligible for Section 45X production tax credits for cells and modules manufactured in the U.S. The dissolution of the JV does not inherently disqualify either party from these benefits, provided they meet the ownership and production criteria outlined by the Treasury Department.
In summary, the end of the BlueOval SK joint venture represents a pragmatic decoupling rather than a complete abandonment of electrification goals. Ford secures control over a critical asset in Tennessee to support its flagship electric truck, while SK On gains the independence to market its Kentucky-made batteries to a wider array of clients. The move reflects the maturing of the EV industry, moving from a phase of speculative mega-projects to one of strategic consolidation and efficiency. As the facilities in Stanton and Glendale near operational readiness, the industry will be watching closely to see how this separation impacts production volumes and unit economics for both companies in 2026 and beyond.
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