Ford Cancels $6.5 Billion Battery Contract with LG Amid Electric Vehicle Restructuring

Ford Motor Company has canceled a $6.5 billion (approximately 9.6 trillion Korean won) agreement for battery supply with South Korea's LG Energy Solution. This decision signifies a major reduction in the American automaker's expansion plans in the electric vehicle market. LG Energy Solution reported in a regulatory filing in Seoul that Ford officially notified them of the cancellation on Wednesday without providing further details regarding renegotiation or potential alternatives.

This decision follows Ford's announcement of accounting charges and losses totaling $19.5 billion linked to a broad restructuring of its electric vehicle operations, amid declining profitability and slower demand compared to previous expectations.

The company recently revealed the cancellation of plans to produce an electric truck from its popular F-series, marking a strategic shift in one of its key electric initiatives.

Additionally, Ford announced the dismantling of its joint battery production project in the U.S. with SK Innovation, indicating a comprehensive reevaluation of its investments in battery supply chains and clean energy. These moves reflect increasing pressures facing global automakers, amid rising production costs and intensifying competition in the shift toward electric vehicles. Following the announcement, shares of LG Energy Solution fell by 0.6% during Wednesday's trading to close at 415,500 Korean won, before the full implications of the decision became clear in the market.