South Korean battery giant LG Energy Solutions has announced the termination of its $6.5 billion long-term battery supply contract with US automaker Ford.

Ford and LG shelve battery deal

According to the official statement, this decision was made due to the radical changes Ford is making to its electric vehicle strategy and the sharp decline in market demand. The canceled massive agreement accounted for 28.5% of LG Energy’s total annual revenue and covered the supply of battery cells and modules between 2027 and 2032.

These batteries were planned to be produced at the Wroclaw plant in Poland and used in Ford’s electric vehicles designed for the European market, primarily the new generation E-Transit commercial van.

However, due to slowing global demand for electric vehicles and changing regulations, Ford decided to completely halt production of some models. The company has shifted to a new strategy focusing on hybrid and internal combustion engine models instead of purely electric models.

In particular, the Donald Trump administration’s removal of tax breaks and relaxation of emissions regulations for electric vehicle purchases in the United States played a decisive role in Ford’s radical reversal.

This development is just one part of Ford’s unilateral withdrawal operation. The company recently announced it absorbed a $19.5 billion loss to halt losses from its electric vehicle unit and terminated its $11.4 billion battery partnership with SK On.