Image source: bloomberg.com
Ford Cancels USD 6 Billion Battery Deal: Overview
- Ford Motor Co. terminates a USD 6.09 billion (9 trillion won) battery supply contract with LG Energy Solution, covering 75 GWh from 2027 to 2032.
- Cancellation follows Ford’s reassessment of EV plans due to policy changes (end of US tax credits under Trump) and weaker demand.
- The original October 2024 agreement totaled USD 8.86 billion for ~1 million EVs; the cancelled portion was 28.5% of LG’s recent annual revenue.
- The remaining 34 GWh deal (USD 2.77 billion equivalent) is intact for 2026-2030, batteries from LG’s Poland plant for E-Transit vans.
- Ford pivots to hybrids, gasoline, and lower-cost EVs/energy storage.
Ford Scraps Major LG Battery Contract: USD 6 Billion Deal Axed as EV Rethink Deepens
Ford Motor Co. delivered a jolt to the battery industry on December 18, 2025, by formally cancelling a massive USD 6.09 billion (9 trillion won) supply agreement with South Korea’s LG Energy Solution. The deal, part of a broader October 2024 partnership worth USD 8.86 billion for batteries powering roughly one million EVs, has been partially dismantled as Ford recalibrates its electrification roadmap amid cooling demand and policy headwinds.
The terminated portion covered 75 gigawatt-hours of batteries scheduled for delivery from 2027 to 2032, representing a significant chunk—about 28.5%—of LG Energy Solution’s most recent annual revenue. An LG official explained, “As Ford adjusts its electrification strategy and rebalances its portfolio, some projects that had been included in our order pipeline have been canceled.” The remaining 34 GWh contract stays alive, with batteries produced at LG’s Poland plant for Ford’s E-Transit electric delivery vans from 2026-2030.
This cancellation is the latest sign of Ford navigating a tougher EV landscape. With the $7,500 US tax credit expired under the Trump administration and profitability pressures mounting on large EVs, the automaker is pivoting toward hybrids, gasoline models, and more affordable electrics, alongside growth in energy storage systems.
Deal Breakdown: What Was Cancelled and What Remains
| Aspect | Cancelled Portion | Remaining Portion |
|---|---|---|
| Value | USD 6.09 billion (9 trillion won) | Part of original USD 8.86 billion |
| Capacity | 75 GWh | 34 GWh |
| Timeline | 2027–2032 | 2026–2030 |
| Production Site | Not specified (likely mixed) | LG Poland plant |
| Vehicle Application | Various Ford EVs | E-Transit electric vans |
The original October 2024 pact was a cornerstone for both: LG securing long-term volume and Ford locking in supply for its ambitious EV lineup. Now, with the larger slice gone, LG faces revenue uncertainty while Ford gains flexibility to scale back commitments.
Why Ford Pulled the Plug
The decision reflects broader industry turbulence:
- Policy Reversal: End of generous US EV incentives under Trump, slashing buyer affordability.
- Demand Softening: Large EVs struggle with profitability; consumers favour hybrids (cheaper, no range anxiety).
- Portfolio Rebalance: Ford prioritises lower-cost EVs, hybrids (where it leads), and energy storage for grids/data centers.
Ford’s Q3 2025 results showed EV losses widening, prompting CEO Jim Farley to signal cuts in capital spending on pure electrics. This cancellation frees billions for more immediate returns.
For LG Energy Solution, already navigating losses from slower shipments, the hit is substantial but not fatal—the Poland deal endures, and diversified clients (Hyundai, GM) provide buffers.
Ripple Effects on the Battery Ecosystem
This high-profile termination echoes the recent SK On-Ford JV dissolution, highlighting Korean suppliers’ exposure to US policy swings. Chinese rivals like CATL gain as OEMs seek cheaper LFP cells, pressuring Korean premium NCM focus.
For the industry, it’s a reality check: EV growth is uneven, with hybrids bridging the gap. Ford’s shift could delay large EV platforms, impacting shared suppliers.
The Road Ahead: Flexibility Over Commitment
Both companies frame it as a strategic adjustment, not fallout. Ford retains access to LG’s Poland output for commercial vans—a growing segment. LG keeps a foothold with a key OEM while pivoting to ESS and other clients.
In a volatile market, this cancellation underscores adaptability: lock in when booming, loosen when cooling. As Ford chases profitable electrification, the big question is whether hybrids will steal the 2030 spotlight from pure EVs.
Source: bioenergytimes.com
Read more about Ev Car News
Also Read
- South Korea’s L&F Slashes Value of Battery Material Supply Deal with Tesla: From $2.9 Billion to $7.386 Million
- Demand for China’s lithium batteries slump early 2026: CPCA Head Warns of Sharp Drop
- Why Silver Price Has Been Surging Even More Than Gold: 2025 Rally Breaks $80 Amid Supply Squeeze and Industrial Demand
- JSW MG Motor India Assured Buy Back For EV Announced: Comprehensive Program to Eliminate Resale Worries
- New EV Manufacturing Unit YEIDA Sector 8D: Neenjas Electric Gets LoI for Chargers and Solar Banks
- 400 Km In 5 Minutes BYD Flash Charging EV Technology: Megawatt Power Explained
