Companies behind BlueOval SK end joint venture to make EV batteries in KY
The South Korean battery maker SK On that had partnered with Ford Motor Co. for U.S. production of parts for electric vehicles, including in Kentucky, is ending the joint venture.
SK On and Ford said Dec. 11 the businesses will break apart their agreement to collaborate and will instead run their BlueOval SK battery plants separately starting sometime in the first three months of 2026 once the split is final.
Ford will take ownership of the Kentucky plant in Glendale, and SK On is set to assume control of a facility in Tennessee, according to the agreement. The joint venture began in 2022 with an initial investment across U.S. facilities of more than $11 billion and a promise to employ more than 10,000 people.
The split comes as electric vehicle demand slows and federal tax credits for their purchase sunset.
During this year’s third quarter, SK On reported an operating loss of nearly $85 million, nearly double the losses reported during the preceding quarter due in part to a decreasing number of battery shipments.
Ford CEO Jim Farley has warned since tax credits ended Sept. 30 that the sale of electric vehicles will soon drop significantly as they take up less of the market. In July, August and September, Ford sold 545,522 vehicles, an increase of more than 8% in sales compared to the same quarter last year. About 15% of sales, or 85,789 vehicles, were Ford’s hybrid and EV models.
“This agreement allows SK On to strategically realign assets and production capacity to improve its operational efficiency,” the South Korean manufacturing company said in a statement. “It also enables the company to enhance productivity, operational flexibility, and respond more effectively to evolving market dynamics and diverse customer needs.”
The company said, in addition to improving financial performance by reducing debt, the split would allow it to continue to shift some its focus from battery production to energy storage projects in the U.S. that could power data center facilities. It signed a deal with a U.S.-based energy storage systems operator in September, according to Reuters.
In a statement to the Herald-Leader, Ford Corporate Communications Manager Ian Thibodeau said the automaker was aware of SK’s disclosure and said, “we have nothing further to share at this time.”
“BlueOval SK is aware of SK On’s disclosure and announcement,” said BlueOval SK External Affairs Director Keli McAlister in an email. “We are working with both of our parent companies to determine what this means for BlueOval SK.”
The two businesses, Ford and SK On, began building a nearly $6 billion, 1,500 acre campus in Hardin County in 2022.
Two plants, each estimated to employ 2,500 people, are being constructed at the site where lithium-ion batteries are being made to power future Ford and Lincoln brand electric vehicles.
The Kentucky 1 facility is the only one in Glendale producing batteries, the first of which were completed earlier this year in August where just 1,450 people are employed.
The second facility was slated to open in 2026, but its construction start continues to be delayed.
Located about 90 miles southwest of Lexington, BlueOval SK is one of the state’s largest economic development deals to date.
In December 2022, Kentucky economic development officials gave final approval for $250 million in upfront public subsidies in the form of loans that can only be forgiven if the companies hit job and wage targets. The state also spent $25 million establishing a workforce training center at the Elizabethtown Community & Technical College.
According to 2023 estimates from a study commissioned by the Hardin County Chamber of Commerce, once complete, the entire campus would become the largest electric vehicle battery plant in the world and the second-largest manufacturing site in the country by square feet.
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