Ford and SK On kill massive $11.4B US battery joint venture, split factories between them

Ford and SK On are dissolving their BlueOval SK joint venture that in 2021 represented an $11.4 billion plan to build three U.S. battery gigafactories; Ford will take the two Kentucky plants (one already in initial operations, one under construction) and SK On will take the BlueOval City Tennessee plant. SK On said the split lets it sell cells to other automakers and into the fast-growing energy storage system market—freeing roughly 45 GWh of capacity—and the transaction is expected to close in Q1 2026; Ford declined further comment. The move undermines Ford’s original vertically integrated EV supply strategy and suggests downward pressure on its volume targets, while giving SK On flexibility to monetize capacity amid slowing EV demand and policy uncertainty.

Analysis

Ford and SK On announced the dissolution of their BlueOval SK joint venture that in 2021 underpinned an $11.4 billion plan to build three U.S. battery gigafactories; Ford will assume full ownership of the two Kentucky plants (one in initial operations, one under construction) while SK On will take the BlueOval City Tennessee plant, with the transfer expected to close in Q1 2026. SK On stated the split enables it to sell cells to other OEMs and into the energy storage system (ESS) market, effectively freeing roughly 45 GWh of Tennessee capacity to pursue third-party customers. The move signals a strategic pivot by SK On away from exclusivity with Ford amid fluctuating Ford EV volume plans and broader narratives of slowing EV demand and policy uncertainty following the end of some federal incentives. Market signals are moderately negative for Ford (sentiment_score -0.45, per-ticker F -0.5) and the market_impact_score (0.55) indicates this restructure materially changes supply-chain risk, creating downside execution risk for Ford and upside commercialization optionality for SK On and ESS-focused buyers.

Key Decisions for Investors

• Reassess exposure to Ford (F) and consider trimming or underweighting until the company provides clear utilization and off-take guidance for the Kentucky plants given the increased execution and demand risk
• Monitor SK On's commercial agreements and ESS market traction closely as the freed ~45 GWh of capacity creates potential upside for cell sales to other OEMs and grid-storage customers; consider targeted exposure to battery/ESS suppliers if third-party offtakes materialize
• Use the expected close in Q1 2026, quarterly updates on plant ramp rates, and any announced off-take contracts as catalysts to re-evaluate positions and consider hedges against further downside in legacy automaker EV volumes