KATHMANDU: Ford Motor has cancelled an electric vehicle (EV) battery supply agreement worth about $6.5 billion with South Korea’s LG Energy Solution, reflecting a broader slowdown in the global EV market.
LG Energy Solution said Ford terminated the deal after deciding to halt production of some EV models due to policy changes and weaker demand for electric vehicles. The cancellation was disclosed in a regulatory filing on Wednesday.
The agreement, signed in October last year, included two contracts under which LG Energy Solution was to supply EV batteries to Ford in Europe starting in 2026 and 2027.
Ford recently announced it will take a $19.5 billion write down on EV-related assets and cancel several planned electric models. The company said the decision was influenced by changes in U.S. government policies and a slowdown in EV demand.
Last week, another South Korean battery maker, SK On, also said it would end its joint venture with Ford for battery factories in the United States. Ford and SK On had invested $11.4 billion in the project in 2022.
Following the announcement, shares of LG Energy Solution fell as much as 7.6 percent in Thursday morning trading.
Ford CEO Jim Farley said the company is reassessing its EV strategy as many automakers struggle to sell electric vehicles profitably in the U.S. At the same time, manufacturers are under pressure to continue EV development for markets such as China and Europe, where regulations are stricter and competition is growing, writes Reuters.
