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(Sharecast News) - South Korea's LG Energy Solution said on Wednesday that it has terminated an electric vehicle (EV) battery-supply deal with Ford Motor worth about 9.6 trillion won ($6.5bn).
The South Korean battery maker said in a regulatory filing that the termination followed a notice from Ford after the automaker decided to halt production of some EV models due to policy changes and shifts in outlook for EV demand.
Ford on Monday said it would take a $19.5bn writedown and was axing several electric-vehicle models as weak demand and President Donald Trump's pro petrol car policies forced a change in direction.
It will no longer make the F-150 Lightning EV model but instead produce an extended-range electric model, a version of a hybrid vehicle called an Erev, which uses a petrol-powered generator to recharge the battery.
Instead, Ford said it will pivot hard into petrol and hybrid models, and eventually hire thousands of workers, even though there will be some layoffs at a jointly owned Tennessee battery plant in the near term.
Ford added that it would spread out the writedown, taken primarily in the fourth quarter and continuing through next year and into 2027. About $8.5bn is related to cancelling planned EV models and $6bn to the dissolution of the battery joint venture with South Korea's SK On, and $5bn on what Ford called "program-related expenses".
US electric vehicle sales fell about 40% in November, following the expiry in September of a $7,500 consumer tax credit, which had been in place for more than 15 years to boost demand. The Trump administration also included in the massive tax and spending bill that passed in July a freeze on fines that automakers pay for violating fuel-economy regulations and is curbing rules on fuel emissions.
Reported by Frank Prenesti for Sharecast.com
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