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Ford's $6 Billion Shock: Why It Canceled LG Battery Deal Amid EV Slowdown

Ford has pulled the plug on a huge battery deal with South Korea's LG Energy Solution. The cancellation is worth a staggering $6 billion and was part of a plan to power electric delivery vans. This move comes as Ford reshuffles its strategy, leaning more into hybrids instead of pure electric models. The shift is largely a reaction to changing government incentives and softer demand for big electric vehicles.

Key Points: Ford Cancels $6 Billion LG Energy Solution EV Battery Deal

  • Ford canceled a massive 75 gigawatt-hour battery supply deal worth $6.09 billion with LG
  • The deal represented 28.5% of LG Energy Solution's recent annual revenue
  • Ford is shifting focus to hybrids and gasoline cars after US EV policy changes
  • The batteries were slated for Ford E-Transit vans from a Polish factory between 2027-2032
  • This was part of a larger $8.86 billion agreement to supply 1 million EVs
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Ford cancels billion-dollar battery deal with South Korea's LG Energy Solution

Ford cancels a $6.09 billion battery supply deal with LG Energy Solution, shifting its EV strategy amid changing market demand and US policy.

"This termination resulted from Ford's decision to halt production of certain EV models due to recent changes in the policy environment and EV demand outlook. - LG Energy Solution regulatory filing"

Seoul, December 18

South Korean battery maker LG Energy Solution Ltd. announced on Wednesday that a massive deal to supply batteries to Ford Motor Co. is now over. The American car company sent a notice to cancel the agreement because it is changing its plans for electric cars. This deal was worth about 9 trillion won (USD 6.09 billion), as per a report by Pulse, the English service of Maeil Business News Korea.

The cancelled contract was a very large one for LG Energy Solution as it involved sending 75 gigawatt-hours of batteries to Ford over a period of six years. These batteries were supposed to be delivered between the years 2027 and 2032. The money from this deal makes up 28.5 per cent of LG's recent annual revenue.

LG Energy Solution, in a regulatory filing, said, "This termination resulted from Ford's decision to halt production of certain EV models due to recent changes in the policy environment and EV demand outlook and its subsequent notice of contract cancellation."

Before this happened, the two companies had a long-term plan. In October 2024, they signed a deal to supply enough batteries to build 1 million electric vehicles, valued at 13 trillion won (USD 8.86 billion). This larger plan was divided into two parts.

One part was for the batteries that have now been cancelled. The second part was for 34 gigawatt-hours of batteries to be sent between 2026 and 2030. The batteries were going to be made at a factory in Poland and used in Ford's electric delivery vans called the E-Transit.

"As Ford adjusts its electrification strategy and rebalances its portfolio, some projects that had been included in our order pipeline have been canceled," the report quoted an official from LG Energy Solution.

Ford is now moving its focus toward making more hybrid cars and cars that run on gasoline. This change happened after the government under Donald Trump stopped giving special tax benefits to people who buy electric cars. Because it is now harder to make a profit from large electric vehicles, Ford is choosing to focus on cheaper electric cars and energy storage systems (ESS).

- ANI

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Reader Comments

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Priya S
Interesting to see how US policy changes (Trump ending tax credits) are causing ripple effects across the globe, all the way to South Korea and Poland. It's a reminder that our own EV policies in India need to be stable and long-term to attract serious investment. 🚗⚡
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Rohit P
Ford focusing on cheaper EVs and hybrids is the smart move. The average Indian buyer, like the average American, isn't ready to pay a huge premium for a full EV yet. Affordable options and good hybrids are the way to go. Hope Indian carmakers are watching.
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Sarah B
While I understand the business decision, it feels a bit short-sighted. Cancelling a 6-year deal worth billions because of a policy change that could itself change in 4 years? Long-term planning seems to have gone out the window. A respectful criticism to Ford's strategy team.
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Karthik V
The pivot to Energy Storage Systems (ESS) is the real story here. Battery tech is crucial not just for cars but for stabilizing our grids, especially with solar and wind power. Maybe this cancellation frees up LG capacity for other, more stable projects.
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Meera T
Yaar, such massive deals getting cancelled is scary for the global economy. So much planning and investment goes into these supply chains. It highlights the risk of being too dependent on one or two big customers. Diversification is key.

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