 |
Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] SK On and Ford announced on the 11th that they have agreed to significantly restructure the operational framework of BlueOval SK, their U.S.-based battery joint venture, effectively winding down the existing 50:50 JV model. Under the revised structure, the two companies will independently own and operate their respective production facilities in Tennessee and Kentucky.
SK On will take full ownership and operation of the Tennessee plant, while Ford, through its subsidiary, will independently operate the Kentucky facilities. BlueOval SK was established in July 2022 as a 50:50 joint venture with a total investment of USD 11.4 billion to build three battery plants in Glendale, Kentucky, and Stanton, Tennessee. While the first Kentucky plant is currently in operation, the launch schedules for the second Kentucky plant and the Tennessee plant will be finalized based on market demand and overall business conditions.
As part of the restructuring, BlueOval SK will sell its Kentucky land, buildings, and related assets to Ford or Ford affiliates. The asset sale amounts to KRW 9.8862 trillion, equivalent to 8.94% of SK Innovation’s consolidated assets. Ford’s acquisition cost will be settled through the cancellation of its 50% equity stake in BlueOval SK, and SK On will offset the same value by redeeming Ford’s shares. Once this process is completed, SK Battery America—SK On’s U.S. subsidiary—will hold 100% ownership of BlueOval SK. The capital reduction is scheduled to take effect on March 31, 2026.
According to SK On, the restructuring is a strategic decision to enhance production efficiency, operational flexibility, and responsiveness to rapidly shifting market conditions. While EV demand in North America has been slowing more than expected, demand for energy storage systems (ESS) is rising sharply.
Industry observers have long pointed out that the JV model with legacy automakers offers limited flexibility in responding to market changes. SK On has already begun converting part of the EV battery production lines at its Georgia-based SK Battery America facility for ESS use. With full operational control of the Tennessee plant, the company will now be able to accelerate ESS-focused production more effectively.
Despite the dissolution of the joint venture structure, SK On emphasized that it will maintain a strong strategic partnership with Ford, centered on the Tennessee plant.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
