Electric Vehicles
In 2021, Ford and South Korean battery maker SK On made one of the most ambitious bets in recent automotive history. Together, they committed $11.4 billion to build a network of battery factories across the United States, convinced that electric vehicles were the future and that controlling their own supply chain was essential to compete. That bet has not paid off, at least not in the way either company imagined. But rather than walking away from the factories they built, both Ford and SK On are now redirecting them toward something the energy world urgently needs: grid-scale battery storage.
The $11 billion retreat
BlueOval SK, the battery manufacturing joint venture formed by Ford and South Korean battery maker SK On in 2021, was designed to supply advanced lithium-ion batteries for Ford’s growing EV lineup across three large-scale plants; two in Kentucky and one in Tennessee. By December 2025, the partnership was over. Slowing EV demand and the removal of the federal $7,500 EV buyer tax credit had made the original plan unworkable. Ford’s Model e division had lost $4.7 billion in 2023 and $5.1 billion in 2024. SK On, meanwhile, posted an operating loss of 124.8 billion Korean won ($84.72 million) in the third quarter of 2025 alone, nearly double its loss in the previous quarter.
The two companies divided the factories between them: SK On took the Tennessee plant, and Ford retained both Kentucky sites. Ford moved quickly to repurpose one of its Kentucky plants from EV battery production to grid-scale energy storage; a transition that first required laying off 1,514 workers in February 2026, before rehiring 2,100 once the repurposed facility comes back online, expected within 18 months.
The EV reality check
The reasons behind the pivot are not hard to find. Used EV sales jumped 34% in 2025, a genuine signal of consumer appetite for battery-powered vehicles, but new EV sales actually fell in the same year, falling well short of what manufacturers had forecast when they committed to these vast factory buildouts.
EVs overall have not failed. With nearly a tenth of all new US vehicle sales in 2025, they are a real and growing part of the market. But “growing” and “growing fast enough to fill a gigafactory” are two different things. Ford built for a future that is taking longer to materialise than planned, and ended up with a plant in need of a new purpose.
The market growing faster than EVs
That purpose has now been found. In May 2026, Ford officially launched Ford Energy, a wholly owned subsidiary that will manufacture battery energy storage systems (BESS) from its Glendale, Kentucky facility. This is the same plant originally built for EV batteries under BlueOval SK. Think of BESS as large-scale versions of home batteries: they charge when electricity is cheap or plentiful and discharge when the grid needs energy most. And, luckily for Ford, they rely on many of the same underlying technologies and supply chains as electric vehicle batteries.
Ford Energy’s flagship product is the DC block: a containerised system built around 512 Ah lithium iron phosphate (LFP) cells, available in two designs, both delivering 5.45 MWh of rated energy capacity per unit. The plan is to produce 20 GWh of these systems annually, with first customer deliveries targeted for the latter part of 2027.
The choice of LFP chemistry is deliberate. LFP batteries now account for over 90% of battery energy storage systems globally, and their prices are now at record lows, falling by more than 15% in 2025 compared with less than 5% for lithium nickel cobalt manganese oxide (NMC) batteries, the second most popular battery chemistry.
Market demand remains exceptionally strong. In the United States alone, grid-scale battery storage deployments are projected to reach 24 GW in 2026, significantly higher than the record 15 GW installed in 2025. Industry forecasts further suggest that cumulative battery storage capacity on the U.S. grid could exceed 600 GWh by 2030, with data centres one of the fastest-growing new sources of demand.
Ford is not alone
Ford is not the only company making this move. South Korean rivals LG Energy Solution and Samsung SDI have also been repurposing EV battery production lines for energy storage systems in response to weaker EV demand, while SK On has also pivoted its Tennessee plant toward stationary storage, signing a supply deal with US-based Flatiron Energy Development for LFP batteries. The global lithium-ion battery market exceeded $150 billion in 2025 and as the International Energy Agency notes, batteries are no longer solely an automotive technology. They are becoming foundational infrastructure for power systems and digital economies alike.
Ford’s pivot from EVs to grid batteries might look like a retreat. But there is another way to read it: a company that invested heavily in the infrastructure of the energy transition and found a different, and arguably more immediately valuable application for what it built. In a market where demand for storage is showing no signs of slowing down, the factories still have a future. Just not the one Ford originally planned.
