- SK On takes over Tennessee plant as Ford gets two in Kentucky.
- Trump administration will cut a loan up to $9.6 billion total.
- Ford CEO says U.S. EV sales could fall by as much as 50 percent.
In 2021, Ford and South Korean battery manufacturer SK On committed to a massive $11.4 billion investment aimed at building several joint-venture electric vehicle battery plants across the United States. It was a huge business decision that showed Ford’s commitment to the EV market.
That was then. As 2025 winds down, the two companies are pulling the plug on the battery partnership altogether, a sharp turn that underscores how turbulent the EV landscape has become.
Also: Ford’s CEO Applauds Trump’s CAFE Rollback, Says They Were Forced Into EVs
The move follows two key developments. First, the rollback of the federal EV tax credit, which has hit sales across the board. Second, the U.S. administration’s recent decision to revise fuel economy standards, a move expected to favor gasoline-powered vehicles over electric ones.
Disruption in the Battery Game
Through the high-profile breakup, SK On will take over the joint venture factory that’s already been established in Tennessee, known as the BlueOval plant. Ford will then take control of two factories in Kentucky located next to each other.
SK On was the one to formally dissolve the partnership, although the company maintains that it intends to continue working with Ford around the Tennessee facility.
It believes that ending the joint venture will allow it to enhance productivity and improve operational flexibility. Additionally, it notes the split will allow it to accelerate its North American energy storage system business.
What Happens to the Government Loan?
One of the more immediate consequences of the split is a reassessment of a government loan approved near the end of the Biden administration. Originally pegged at up to $9.6 billion for the joint venture, the loan will now be reduced under the Trump administration’s oversight.
Exactly how much it will be cut remains to be seen. According to Bloomberg, the loan will be restructured to “reduce exposure to taxpayers and ensure its prompt repayment.”
Read: Ford And SK On Get $9.6 Billion Loan From US Government For Local Battery Plants
It’s understood that Ford is working voluntarily with the Energy Department to repay the loan more quickly than originally planned.
Bleak Outlook for EV Sales
In the background, Ford’s local EV sales are falling, and chief executive Jim Farley expects further carnage. He recently said that because of the Trump administration, EV sales could fall by as much as 50 percent in the US.
Ford also lost $5.1 billion before interest and taxes on its EV business in 2024 and expects to lose even more this year.
“We believe the writing was on the wall this partnership was not going to work moving forward,” WedBush securities managing director Dan Ives told the Detroit Free Press.
“Ford has to make some difficult moves and this was a smart strategic one to rip the band-aid off. The EV market is dramatically scaled down for Ford now and they have to adjust accordingly.”