Ford Backs Out of Massive Battery Deals

Core Viewpoint - Ford has decided to abandon its fully-electric F-150 Lightning and shift away from aggressive electric vehicle (EV) plans due to significant financial losses in the EV sector, totaling $13 billion since 2023, and anticipates an additional $19.5 billion loss in Q4 [1] Group 1: Changes in EV Strategy - Ford is pivoting towards extended-range gas-powered vehicles and hybrids as consumer demand for EVs declines [1] - The company has scrapped a $6.5 billion deal with LG Energy Solutions, which was intended to produce 500,000 batteries annually [2] - Ford had previously contracted LG to supply batteries for approximately 2.5 million EVs from 2026 to 2030, including for its commercial vehicle portfolio [2] Group 2: Impact of Policy Changes - LG's regulatory filing indicated that Ford's decision was influenced by recent policy changes and shifts in EV demand forecasts, particularly after the federal EV tax credit ended and fuel economy regulations were eased [3] - The decline in the EV market has prompted automakers, including Ford, to make rapid adjustments to their strategies [3] Group 3: Joint Venture Developments - Ford has also backed out of a joint venture with SK On to build multiple EV battery factories in the U.S., resulting in SK On retaining the BlueOval factory in Tennessee while Ford will take over two factories in Kentucky [4] - The joint venture was set to receive a government loan of approximately $9.6 billion, which will now be restructured [5] - Ford plans to rename and retool its Tennessee Electric Vehicle Center to produce lower-priced gas-powered trucks instead [5]