LG Energy Solution announced on December 18 that Ford Motor Co. has terminated a long-term contract worth 9.603 trillion won for electric vehicle battery cells and modules. The contract, signed in October of last year, represented approximately 28.5% of LG Energy Solution’s recent sales revenue.
The two companies had previously signed long-term battery supply contracts for 75 GWh (gigawatt-hours) over six years from 2027 to 2032, and 34 GWh over five years from 2026 to 2030. The products were scheduled to be entirely produced at LG Energy Solution’s Wrocław plant in Poland and supplied for European electric vehicles. The E-Transit, Ford’s next-generation electric commercial vehicle model, was mentioned as the target vehicle for battery installation.
LG Energy Solution stated, “This matter is due to recent policy environment changes and shifts in electric vehicle demand forecasts, which led to our client company’s (Ford) decision to halt production of some electric vehicle models and the subsequent contract termination notice,” adding, “We plan to continue our mid-to-long-term cooperative relationship with the client company.”
The cancellation follows Ford’s broader strategic shift toward hybrid and internal combustion engine vehicles after changes to U.S. federal tax incentives affected electric vehicle economics. As part of this pivot, Ford has paused production of large EV models—including the F-150 Lightning pickup truck—and is refocusing on trucks, vans, more affordable electric vehicles, and energy storage systems.
Analysts say such contract revisions reflect the challenges automakers face in balancing electrification targets with evolving regulatory landscapes and market demand uncertainties. OEMs and battery suppliers alike are adjusting supply commitments and production plans to align with shifting policy environments and consumer trends.
Source: Business Korea
