SK On and Ford Ends BlueOval SK as They Pivots to Energy Storage Systems

• Ford and SK On are ending the BlueOval SK joint venture, splitting ownership of U.S. battery plants.

• The move reflects softening EV demand and a strategic pivot toward battery energy storage systems.

• Kentucky plants will be repurposed for utility-scale storage, including LFP prismatic cells, BESS modules, and containerized systems.

• The shift signals new demand patterns for power electronics and industrial-grade semiconductors, as storage deployments require high-power switching, isolation, sensing, and robust passives.

BlueOval SK was formed in 2021 to build a large-scale, U.S.-based EV battery supply chain. The joint venture outlined three battery plants supported by an investment widely reported at $11.4 billion.

In December 2025, Ford and SK On announced that they would unwind their U.S. battery joint venture and split ownership of the sites. Ford will take full control of the Kentucky plants, while SK On will assume ownership of the Tennessee facility at BlueOval City. The restructuring is expected to close by Q1 2026, pending approvals, with the Tennessee start date still undecided during the transition.

Softer EV Demand, Stronger Storage Pull

SK On described the move as a financial and operational reset to lower debt and fixed costs, improve stability, and reallocate resources toward energy storage systems.

Ford, meanwhile, is recalibrating its EV strategy after disclosing a significant EV-related write-down and saying it is redeploying capital toward trucks, hybrids, and battery energy storage. The business case for some large EV programs weakened due to a combination of lower-than-expected demand, high costs, and regulatory changes. Reuters also pointed to broader U.S. EV market softness and policy uncertainty as pressure points on near-term adoption.

The New Center of Gravity: Grid Storage and Data Centers

In a Dec. 15 company release, Ford announced plans to launch a battery energy storage system business targeting energy infrastructure and data center demand, with goals to begin shipping BESS systems in 2027 and reach 20 GWh of annual capacity.

Crucially, Ford said it will repurpose existing U.S. battery manufacturing capacity in Glendale, Kentucky to produce utility-scale storage products, including 5 MWh+ storage systems, LFP prismatic cells, BESS modules, and 20-foot DC containerized systems.

Local reporting has already flagged workforce disruption tied to the Kentucky conversion, underscoring how quickly “EV capacity” can be redirected when end-market demand shifts.

EV and grid-scale storage systems rely on many of the same power conversion and control building blocks high-power switching devices, isolation and protection ICs, sensing and control silicon, and ruggedized passives. What changes is the demand profile.

EV programs tend to scale unevenly, shaped by model cycles, incentive structures, and consumer sentiment. By contrast, grid and data center storage demand is increasingly tied to infrastructure investment cycles, often favoring larger installations, longer procurement horizons, and stricter performance specifications.

Reuters has noted that SK On, along with other Korean battery makers, has been leaning more heavily into energy storage as EV battery shipments soften, using ESS as a strategic outlet for capacity.

What comes next

The pace at which Ford converts Kentucky capacity into storage output will be closely watched. The company has said initial production could come online within roughly 18 months, while the timeline and customer mix for the Tennessee site remain uncertain during the ownership transition.

The BlueOval SK restructuring may offer an early blueprint for how EV-focused factories adapt to shifting demand. If storage margins and offtake agreements continue to strengthen, more battery lines originally built for vehicles could be redesigned for stationary applications, reshaping demand signals across the power electronics and industrial semiconductor supply chain.

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