Ford–SK Battery Alliance Collapses, Triggering Uncertainty for Major EV Projects in Kentucky and Tennessee

The U.S. electric-vehicle supply chain was shaken this week after Ford and the South Korean battery manufacturer SK On abruptly dissolved their partnership, halting the joint development of two massive battery factories planned for Kentucky and Tennessee.

Ford–SK Battery Alliance Collapses, Triggering Uncertainty for Major EV Projects in Kentucky and Tennessee

The breakup, confirmed after days de escalating tensions behind the scenes, disrupts what had been one of the most ambitious industrial projects tied to America’s EV transition.

The decision lands at a moment when the national EV market faces slowing demand and increased financial pressure, raising concerns about investment stability in states that had positioned themselves as emerging hubs for battery production.

A Multibillion-Dollar Vision That Redefined Industrial Expectations

The Ford–SK partnership had been celebrated as a cornerstone of the next era of U.S. automotive manufacturing.Central to the alliance was BlueOval SK Battery Park, a sprawling multibillion-dollar complex in Glendale, Kentucky, designed to supply batteries for Ford’s expanding electric-vehicle lineup.

A second plant in Tennessee would complete the production chain, supporting the company’s future EV manufacturing campus in the region.

Together, the projects represented thousands of anticipated jobs, a surge in supplier activity and a symbolic shift placing Kentucky and Tennessee at the forefront of America’s clean-tech economy.

Breakup Details: Who Keeps What

EnergyChannel’s independent review indicates that the separation outlines a clear division of ownership:

• Ford is expected to take full control of the Kentucky battery facilities.

• SK On will retain exclusive ownership and operation of the Tennessee plant.

While both companies have limited their public comments, the restructuring suggests Ford is reassessing how it will source and scale battery production amid a rapidly changing EV market.

Economic Ripples Across the Two States

The impact of the dissolution is immediate and far-reaching.Kentucky, which had already begun celebrating early operational milestones, now awaits clarity on job numbers, production timelines and long-term investment stability.

The project had been promoted as the largest single economic investment in the state’s history.

In Tennessee, the SK-controlled facility faces the challenge of moving forward independently, navigating global competition and cost pressures in the battery sector.

Federal Tax Credit Elimination Intensifies the Pressure

The breakup also comes on the heels of a significant market disruption: the discontinuation of the US$7,500 federal tax credit for electric vehicles, which ended on September 30.The removal of the incentive triggered a sharp drop in EV sales nationwide, forcing several automakers including Ford to scale back production plans and revise short-term strategies.

With demand cooling, large-scale battery projects became more exposed to shifts in corporate and political priorities.

What Comes Next for Ford and SK On

Ford is expected to release updated guidance in the coming weeks outlining the future of the Kentucky complex including whether the production strategy will remain intact or undergo a redesign.

SK On, meanwhile, must prove it can maintain momentum in Tennessee without its former partner, at a time when global battery manufacturers face tightening margins and rising competition.

The situation underscores the fragility of the EV supply chain in the United States, where industrial growth is closely linked to policy consistency and long-term investment commitments.

A Turning Point for America’s EV Ambitions

The dissolution of the Ford–SK alliance marks more than the end of a business arrangement. It highlights the structural challenges of scaling EV manufacturing in the U.S. amid political turbulence, shifting incentives and evolving market expectations.

EnergyChannel will continue monitoring the reorganization of both projects and its implications for workers, suppliers and the broader trajectory of America's electric-vehicle industry.

Ford–SK Battery Alliance Collapses, Triggering Uncertainty for Major EV Projects in Kentucky and Tennessee