Ford adjusts its electric vehicle strategy amid slowing sales and rising losses, ending a key joint venture and a major supply agreement.
Dissolving the BlueOval SK Joint Venture
Ford and SK On dissolved their BlueOval SK joint venture on December 11, 2025, splitting assets from the $11.4 billion partnership launched in 2021.
Ford takes full ownership of two battery plants in Glendale, Kentucky, including Kentucky Plant 1, operational since August 2025, which produces cells for the F-150 Lightning. SK On assumes control of the plant in Stanton, Tennessee. The move allows both companies greater flexibility.
The decision responds to cooling EV demand and operational needs, as confirmed in SK On’s official statement. Ford issued a brief acknowledgement, noting no further details.
This aligns with Ford’s broader cuts, including paused construction on Kentucky Plant 2 due to market conditions. The U.S. Department of Energy will restructure a $9.2 billion loan to match the new setup.
Canceling the LG Energy Solution Supply Deal
Ford also ended a $6.5 billion battery supply agreement with LG Energy Solution. LG terminated the 9.6 trillion won deal after Ford’s notice on December 16, 2025.
The contracts, signed in October 2024, were set to supply 109 gigawatt-hours of batteries for Ford’s European electric commercial vans starting in 2026.
The cancellation stems from Ford halting production of certain EV models, influenced by policy changes and weaker EV demand outlook. Existing supplies from LG’s Poland facilities for Ford’s current European commercial EVs continue unaffected, as the deal targets future production.
LG confirmed no impact on ongoing partnerships in a statement to investors.
Broader EV Market Challenges
These shifts highlight industry headwinds. Ford’s Model e division reported losses of $3.6 billion year-to-date in 2025, following $5.1 billion in 2024, driven by high costs and slower sales. U.S. EV sales fell 60.8% in November 2025 to 4,247 units, with F-150 Lightning down 72%.
Market factors include high interest rates, consumer range anxiety, and infrastructure gaps, as noted in PwC’s 2025 auto trends report.
Global EV sales grew 21% to 18.5 million units in 2025 but slowed amid economic pressures. Automakers face added challenges from policy shifts and competition.
Ford’s actions reflect a pragmatic recalibration, focusing on hybrids and gas vehicles for profitability. The company raised 2025 earnings guidance to $7 billion before interest and taxes, up from $6 billion to $6.5 billion, signaling confidence in the pivot.
