Ford Seeks to Sell Excess Battery Supply in Weak EV Market
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Ford Motor Co. and South Korea’s SK On are seeking buyers for excess battery supply produced at their new joint-venture Kentucky factory, underscoring the waning demand for electric vehicles in the U.S.
The plant, which officially began production Aug. 19, was originally intended to support Ford’s own EV business. While the facility will still supply the automaker’s F-150 Lightning plug-in pickup initially, the duo has broadened its strategy to sign up additional customers in order to better utilize the production capacity in the current market.
New clients could include firms in the energy storage business in addition to EV makers, according to Michael Adams, CEO of the BlueOvalSK joint venture. Japan’s Nissan Motor Co. was also nearing a deal to procure batteries from the venture, Bloomberg News reported in May, though no agreement has been announced.
“Both of our parents are looking for other opportunities for other new business,” Adams said in an interview. He described the prospects for signing up new customers as “fairly high.”
It’s official! The first ever BlueOval SK battery to be sold to our customer rolled off the assembly line today at our Kentucky 1 plant. We enjoyed celebrating with team members! — BlueOval SK (@BlueOval_SK)
The struggle to fully utilize the first of three factories Ford and SK On have planned reflects the dramatic slowdown in EV adoption. Sales of the F-150 Lightning declined 26% in the second quarter. Battery-powered cars risk becoming an even harder sell starting Sept. 30, when President Donald Trump’s $3.4 trillion fiscal package eliminates a $7,500 consumer tax credit for EV purchases.
Ford and SK On joined forces in 2021 to build the factories in Kentucky and Tennessee, eventually securing a $9.2 billion loan from the U.S. Department of Energy for the endeavor.
The companies have since scaled back those plans as EV sales failed to take off as expected. Their first factory in Glendale, Ky., will initially employ 1,450 workers, down from the 2,500 the companies had predicted.
The companies have also paused the start of production at a second battery plant in Kentucky. Ford, meanwhile, recently delayed its next-generation electric F-Series pickup truck to mid-2028, from late 2027, as it slow rolls the start of production of a $5.6 billion manufacturing complex in Stanton, Tenn., which includes the third BlueOvalSK battery factory.
‘Slower Pace’
Adams said the Tennessee site will still begin output in 2027 to ensure its batteries are ready when Ford eventually begins producing its next F-Series plug-in pickup. But everything is moving more slowly than originally planned, he said.
“We’re in a monitoring phase and just being conservative in what we do in order to make sure that we’re safe,” Adams said. “I think the market continues to grow, but it will be at a slower pace.”
The new factory will begin producing batteries for Ford’s E-Transit electric van in the fourth quarter, Adams said.
Ford is overhauling its EV strategy to focus on smaller, more affordable models. Key to that effort are lower-cost lithium iron phosphate batteries that the automaker plans to begin making next year at a new $3 billion battery factory in Marshall, Mich., which is not affiliated with SK On. The BlueOvalSK factories are producing more commonly used Lithium Nickel Manganese Cobalt batteries.
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Ford last year lost $5.1 billion on its EV business and has said that deficit could widen this year as it brings its new line of budget EVs to life. CEO Jim Farley has said any new battery-powered model must be profitable in its first year on the market.
Squeezing more output from its joint venture battery plants is part of how Ford seeks to be profitable in an increasingly challenging EV market.
“We are strengthening our domestic supply chain and making strides in cost reduction as we look to build a profitable electric vehicle business,” Lisa Drake, Ford’s vice president of technology platform programs and EV systems, said in a statement.
