In December 2025, South Korea’s LG Energy Solution (LGES) revealed a major setback after Ford cancels EV battery deal valued at approximately $6.5 billion (9.6 trillion won). The termination marks one of the largest contract cancellations in the global electric vehicle (EV) supply chain and reflects the growing uncertainty surrounding EV demand and investment strategies worldwide.
The cancelled agreement was a long-term battery supply contract that was originally scheduled to run from 2027 to 2032. Under the deal, LGES was expected to supply around 75 gigawatt-hours (GWh) of EV batteries for Ford’s European electric vehicle lineup. These batteries were primarily intended for commercial vehicles such as the E-Transit van and were to be manufactured at LG Energy Solution’s facility in Wroclaw, Poland. The scale of the contract was significant, accounting for more than one-third of LGES’s total revenue in the previous year.
According to LG Energy Solution’s regulatory filing, the decision followed formal notice from Ford after the automaker chose to halt production of several EV models. Ford cited multiple reasons behind this shift, including policy changes in key markets and a weaker outlook for electric vehicle demand. The company has been reassessing its electrification strategy amid slower-than-expected consumer adoption and rising production costs.
Financial pressures have also played a critical role. Ford recently announced a substantial $19.5 billion write-down related to its EV business. Alongside this, the company scrapped several planned projects, including a next-generation electric F-Series truck. As Ford cancels EV battery deal commitments tied to discontinued models, suppliers like LGES are left exposed to sudden revenue gaps.
This move is not an isolated case but part of a broader industry trend in 2025. Ford has also started dismantling its $11.4 billion U.S. battery joint venture with SK On, known as BlueOval SK. The partners are transitioning toward independent ownership of battery plants in Kentucky and Tennessee, signalling a retreat from large-scale joint ventures with South Korean battery makers.
For LG Energy Solution, the impact is substantial, but the company continues to seek alternative customers and long-term growth opportunities. Meanwhile, Ford cancels EV battery deal arrangements as it recalibrates its EV roadmap, focusing on profitability and flexibility rather than aggressive expansion. The development underscores how quickly strategies can change in the evolving global EV market.
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