Seoul: South Korean battery maker SK On Co. announced the termination of its joint partnership with U.S. automaker Ford Motor Co., a move that will see both companies independently own and operate electric vehicle (EV) battery plants in the United States.
According to Yonhap News Agency, SK On has rebranded the former BlueOval SK Tennessee plant to "SK On Tennessee" and has commenced independent operations at the facility. Meanwhile, Ford will take ownership of two separate battery plants in Kentucky. This restructuring comes five months after the initial announcement to dissolve the joint venture, which was originally established in 2022 in light of anticipated high demand for EVs.
SK On anticipates that ending the joint venture will significantly decrease its debt by approximately 5.4 trillion won (US$3.6 billion), and it expects to save around US$180 million annually in interest costs. Additionally, the company projects a reduction in annual depreciation expenses related to the Kentucky plants by about 330 billion won.
The restructuring is part of SK On's strategy to enhance its financial stability and improve operational efficiency at its U.S. facilities, positioning the company to better adapt to changes in the North American market. The original joint venture with Ford was created during a surge in EV investments, driven by the Biden administration's efforts to establish a U.S. EV supply chain. However, a decline in EV demand and policy uncertainties under the Trump administration have impacted the market.
This development follows the March dismissal of 968 employees at SK On's battery plant in Georgia, attributed to the weakening demand for EVs.