South Korea’s LG Energy Solution Ltd. said on Wednesday that its major battery supply agreement with Ford Motor Co. has been terminated, after the US automaker decided to revise its electric vehicle strategy. Ford issued a notice to cancel the contract as it reassesses its EV plans, according to a report by Pulse, the English-language service of Maeil Business News Korea. The deal was valued at around 9 trillion won (USD 6.09 billion).
The cancelled agreement was one of LG Energy Solution’s largest contracts and involved supplying 75 gigawatt-hours of batteries to Ford over six years, from 2027 to 2032. The contract value accounted for about 28.5 per cent of LG’s most recent annual revenue.
In a regulatory filing, LG Energy Solution said the termination followed Ford’s decision to halt production of certain EV models due to changes in the policy environment and a weaker outlook for EV demand, which led the automaker to formally cancel the contract.
The development comes after the two companies had outlined a broader long-term partnership. In October 2024, LG Energy Solution and Ford signed an agreement worth 13 trillion won (USD 8.86 billion) to supply batteries sufficient for about one million electric vehicles. That deal was split into two components.
One component covered the 75 gigawatt-hours of batteries that have now been cancelled. The second remains intact and involves the supply of 34 gigawatt-hours of batteries between 2026 and 2030, to be manufactured at LG Energy Solution’s plant in Poland and used in Ford’s E-Transit electric delivery vans.
“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 LG Energy Solution official as saying.
Ford is increasingly shifting its focus towards hybrid and gasoline-powered vehicles, following the withdrawal of special tax incentives for EV buyers under the Donald Trump administration. With profitability pressures rising for large electric vehicles, the automaker is prioritising lower-cost EVs and energy storage systems.
