Ford has cancelled another major battery deal following its decision to scale back electric vehicle (EV) plans and scrap a previous battery investment project with South Korea’s SK On. This time, the automaker has terminated a $6.5 billion agreement with LG Energy Solution, citing changing market conditions and a slowdown in EV demand.
The cancellation was disclosed through regulatory filings submitted by LG in South Korea and comes shortly after Ford announced a significant pullback in its EV strategy, including the decision to shelve the all-electric F-150 Lightning program. The $6.5 billion deal represents roughly one-third of LG’s total revenue from the previous year.
The agreement between Ford and LG was originally signed in October 2024. Under its terms, LG was to supply Ford with a total of 34 GWh of batteries between 2026 and 2030, enough to support around 500,000 electric vehicles per year based on an average battery capacity of 75 kWh per vehicle. In addition, LG planned to supply a further 75 GWh of batteries for Ford’s commercial vehicles between 2027 and 2032, produced at LG’s plant in Poland for vehicles destined for the European market.
In its regulatory filing, LG stated that the contract termination resulted from Ford’s decision to discontinue production of certain EV models, driven by recent policy changes and revised forecasts for future EV demand.
Since President Donald Trump returned to office for a second term, the EV market has undergone rapid changes. While EV demand in the United States remained strong during the first nine months of the year, sales dropped sharply after the $7,500 federal EV tax credit was withdrawn.
At the same time, the Trump administration has relaxed fuel economy regulations, encouraging automakers such as Ford to place greater emphasis on internal combustion engine vehicles. Meanwhile, the European Commission has softened its stance on zero-emissions policies, proposing a 90 percent CO₂ reduction target for new vehicles by 2035 instead of a complete ban on combustion engines.
Ford CEO Jim Farley recently said he expects EV sales in the United States to fall by as much as 50 percent as a result of these major policy shifts.
Source: Carscoops
