SK On and Ford have completed the separation of their U.S. electric vehicle battery joint venture, finalizing a restructure that dissolves their partnership established in 2022. Effective immediately, SK On will independently operate the former BlueOval SK Tennessee facility under its new name, SK On Tennessee. Ford will take sole ownership and management of two battery plants in Kentucky.
The dissolution, announced five months ago, aims to streamline both companies’ operations amid evolving market conditions. SK On projects that exiting the joint venture will cut its debt burden by roughly 5.4 trillion won (about $3.6 billion) and lower annual interest expenses by an estimated $180 million. The company also expects to reduce annual depreciation costs by around 330 billion won previously tied to the Kentucky plants.
SK On said the move will bolster its financial structure and enhance operational efficiency across its U.S. facilities, enabling more agile responses to developments in the North American electric vehicle market. The original SK-Ford collaboration took shape during a surge in EV investments, driven in part by incentives under the Biden administration to develop a domestic EV supply chain. However, slower-than-anticipated EV sales and shifting policy priorities have since weighed on industry momentum.
This restructuring follows workforce reductions earlier this year, when SK On laid off 968 employees at its Georgia battery plant amid weakening EV demand. As the company pivots to an independent operating model in Tennessee, it intends to leverage its global battery expertise to meet future market requirements while maintaining financial discipline.
Ford, for its part, will continue battery production at its Kentucky sites under sole ownership, focusing on supply for its expanding EV lineup. Both companies emphasized that the separation allows each to pursue tailored strategies and investments aligned with their long-term objectives in the competitive EV sector.
Source: Korea JoongAng Daily
