SK On has decided to terminate its joint venture structure with U.S. automaker Ford. Analysts cited the slower-than-expected pace of electric vehicle transition and broader conditions in the global automobile market as key factors. However, the two companies will maintain their strategic partnership.

SK On announced on the 11th that it had decided with Ford to reorganize the operating structure of their U.S. battery production joint venture, BlueOval SK. BlueOval SK is a joint venture in which SK and Ford each hold a 50% stake. The core of the restructuring is that the two companies will independently own and operate the production facilities.

Accordingly, SK On has agreed to operate the Tennessee plant, while Ford will operate the Kentucky plant through a subsidiary. SK On stressed that this was a strategic decision aimed at improving productivity through “selection and concentration,” and enhancing operational flexibility and response speed to respond effectively to changing markets and customer demands. An SK On official said, “Even after the termination of the joint venture, we plan to firmly maintain our strategic partnership with Ford centered on the Tennessee plant,” adding, “The Tennessee plant is located within BlueOval City, Ford’s electric vehicle and parts complex, which provides an advantageous location for the timely supply of batteries.”

The company expects the agreement to be finalized around the end of the first quarter of next year, following approval by relevant authorities and completion of related procedures.

An SK On official said, “This agreement can be seen as a strategic reorganization of assets and production scale to improve operational efficiency,” and added, “We plan to supply batteries for electric vehicles and ESS from the 45GWh Tennessee plant to Ford and other various customers, and to strengthen our fundamentals in the North American market with a focus on profitability.”

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