SK on to focus on Tennessee Plant after splitting from Ford Motor

(SK on)

South Korean battery major SK on Co. announced on Thursday that it will reorganize operations of BlueOval SK, a joint venture with U.S. Ford Motor Co. The move comes amid a temporary slowdown in electric vehicle (EV) demand and weak sales.

Until now, SK on and Ford each held a 50 percent stake in BlueOval SK and jointly operated plants in Tennessee and Kentucky.

Under the new agreement, however, each company will independently own and operate separate production facilities.

SK on will operate the Tennessee plant while Ford, through a subsidiary, will run the plant in Kentucky.

“By adopting a strategy of selection and concentration, we aim to enhance productivity, increase operational flexibility, and improve responsiveness to a rapidly changing market,” said an official from SK on.

The company expects the restructuring to be finalized sometime after the first quarter of next year, once regulatory approvals are completed.

Even after winding down the joint-venture operation, SK on plans to maintain a strategic partnership with Ford, with the Tennessee plant remaining central to that collaboration.

Located inside Ford’s EV and component hub BlueOveal City, the plant is strategically positioned to supply batteries in a timely manner.

Industry observers, however, noted that the weakening battery market has strained the partnership between SK on and Ford.

“This agreement is a strategic reorganization of assets and production capacity to improve operational efficiency,” SK on said. “At the 45GWh Tennessee plant, we will supply batteries for EVs and energy storage systems to Ford and other customers, focusing on profitability and strengthening our presence in the North American market.”

Last month, SK on also took steps to restructure its operations in China by swapping equity stakes with Chinese battery maker EVE Energy.

Previously, the two companies jointly operated SKOJ in Yancheng, Jiangsu Province, and EUE in Huizhou, Guangdong Province.

As part of the restructuring, SK on sold its entire 49 percent stake in the Huizhou subsidiary, and in return acquired EVE Energy’s 30 percent stake in SKOJ.

With the share swap, SKOJ became wholly owned by SK on, while EUE is now fully owned by EVE Energy, creating a structure that allows each company to control production volumes at its core facilities.