Ford Motor Co. has terminated a multi-billion dollar battery supply agreement with South Korea’s LG Energy Solution as it scales back its electric vehicle ambitions and pivots toward hybrids and more efficient internal combustion models.
According to a regulatory filing dated Dec. 18 by LG Energy Solution, Ford canceled a contract worth 9.6 trillion won (approximately $6.5 billion) covering the supply of 75 gigawatt hours of battery cells for the European market. The agreement, signed in October 2024, was officially terminated on Dec. 17.
The decision follows Ford’s broader move to revise its electrification targets amid weakening global demand for EVs and changing policy conditions. LG Energy Solution said the cancellation was driven by Ford’s plans to discontinue certain EV models, including the electric F-150 Lightning, which the automaker recently pulled due to sluggish sales.
Ford has not commented publicly on the termination, but the move comes as the company increasingly relies on gasoline-powered trucks and SUVs for profitability, while its low-volume EV business continues to struggle. The automaker has indicated that the electric F-150 Lightning will be replaced by a version featuring a gasoline range-extender powertrain.
The canceled agreement was part of a wider battery sourcing strategy in Europe. Industry reports indicate Ford had two separate supply deals with LG Energy Solution totaling 109 GWh, with deliveries planned between 2026 and 2032. The terminated portion covered 75 GWh, while a smaller contract remains in place.
The LG contract cancellation closely follows Ford’s mutual decision with SK On to dissolve their BlueOval SK battery joint venture, established in 2021 as part of an $11.4 billion plan to build large-scale battery plants in the United States. The unwind underscores Ford’s retreat from earlier, more aggressive EV production forecasts.
Despite the setback, LG Energy Solution said it remains committed to its long-term partnership with Ford and continues to invest in diversification. The company has been expanding into energy storage system batteries, driven by surging demand from U.S. data center construction linked to artificial intelligence growth, while maintaining its focus on advanced automotive battery technologies.
Ford, meanwhile, has disclosed a $19.5 billion writedown tied to its revised EV investments, signaling a strategic reset as it prioritizes affordability, hybrids and more flexible powertrain solutions in response to market realities.
