Ford and Honda battery partnerships affected as energy companies divert EV battery investment to energy storage
Recent examples show that joint ventures such as the one launched by Ford and Sk On have had to adapt to lower-than-expected EV demand, with energy companies pivoting towards stationary energy storage – where the demand appears to be more hopeful.
Ford and SK On have agreed to dissolve their battery manufacturing joint venture in the US – BlueOval SK
BlueOval SK
Electric vehicle demand rose in 2025, with EVs representing
over a quarter of new car sales in 2025 – according to data from Ember Energy –
while SNE Research data shows global EV registrations in 2025 rose by 22.9% year-over-year
to 19.17 million. Despite this, EV uptake in major global markets has been
slower than expected.
“Rising EV uptake is an undoubted positive, but the pace is
still too slow and the cost to industry too high,” said Mike Hawes, chief executive
of the Society of Motor Manufacturers and Traders (SMMT) on 6 January, 2026 in
response to data showing a rise in BEV market share for new UK vehicle registrations
rising from 23.43% in 2024 to 23.43% in 2025.
Last year, BloombergNEF adjusted its projections for EV
battery demand, reducing it by 8% in response to market conditions including
lower EV sales in key markets like the US.
From a regulatory standpoint, 2025 saw EV sales targets
relaxed and incentives for EV adoption reduced. In the US, the Trump administration revoked
the Biden administration’s 2030 EV sales target and ended
consumer EV tax credits. Also in 2025, the EU
scrapped its 2035 ban on the sale of new ICE vehicles and the UK budget saw
the announcement of a new
“pay-per-mile” tax on EVs and hybrid vehicles in the UK.
With EV demand not living up to initial expectations and actions
such as these likely to impact adoption in significant markets going forward, some
companies that initially invested in EV battery production are beginning to pivot
towards a market with growing demand – energy storage.
According to a Reuters calculation based on UBS data,
lithium demand for energy storage is expected to grow by 55% in 2026, following
a jump of 71% in 2025.
Ford and SK On dissolve battery manufacturing JV
As part of a strategy shift announced on December 15, 2025 –
which also saw it end production of the F-150 Lightning electric truck – Ford announced
it will be launching a new business to "capture the large demand for
battery energy storage from data centres and infrastructure to support the
electric grid".
The automaker will repurpose existing US battery
manufacturing capacity in Glendale, Kentucky, to serve the battery energy
storage systems market, with Ford explicitly saying that this project is
designed to leverage “currently underutilised” electric vehicle battery
capacity to “create a new, diversified and profitable revenue stream for Ford”.
This announcement came after Ford announced it had reached
an agreement with South Korean battery manufacturer SK On to dissolve their
joint venture, BlueOval SK, to build three battery manufacturing plants in the
US – two in Kentucky and one in Tennessee.
Under this agreement, a Ford subsidiary will independently
own and operate the two Kentucky battery plants, while SK On will fully own and
operate the Tennessee battery plant.
"This agreement is a strategic restructuring of assets
and production scale to enhance operational efficiency," an SK On spokesperson
said in a statement. “We will focus on strengthening profitability in the North
American market by supplying batteries and ESS for electric vehicles to Ford
and other clients from the 45GWh-capacity Tennessee plant.”
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Honda buys LG Energy Solution’s stake in JV’s Ohio battery
plant
Similar to Ford’s joint venture with SK On, Honda launched its own joint venture in 2023 with another South Korean energy company – LG Energy Solution – to build a new US EV battery plant in Ohio.
Established as L-H Battery Company, the joint venture’s goal
was to secure local EV battery supply for Honda’s upcoming electric vehicles
for the North American market, targeting mass production of lithium-ion EV
battery cells by late-2025.
But on 23 December 2025, LG Energy Solution submitted a
regulatory filing confirming plans to sell “all assets related to L-H Battery
Company, Inc’s building and infrastructure excluding its land and equipment” to
Honda. In its filing, LG Energy Solution cites the reason for the
divestment as “to increase the operational efficiency of the JV”.
Previously, in October 2024, the company announced it would “expand
into circular energy business, going beyond battery manufacturing”. This new
vision, it said, “underscores that the essence of LG Energy Solution’s business
lies not merely in battery production, but in facilitating the energy
circulation across the entire cycle from storage to movement of energy”.
“The meaning of this vision is to expand our business with
energy that awakens all potential powers, thereby enabling the company and its
members to realise infinite growth potential,” explained David Kim, CEO of LG
Energy Solution, at the time.
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More energy companies making the switch to stationary storage
These are not the only examples of firms pivoting from EV battery
manufacturing to energy storage. In June 2025, Redwood Materials launched its
Redwood Energy business line to repurpose used EV batteries into grid-scale
energy storage systems, targeting applications such as AI data centres and
utility storage instead of solely recycling materials for EV supply chains.
And more recently, energy company Nuvve issued a letter to
its shareholders on December 18, 2025 outlining a “pivot to meet larger demands
and needs”.
The company, which operates in Europe, the US, Japan and
South Korea, said that it will be applying its expertise in EV batteries to stationary
energy storage and microgrid solutions, where “market adoption and near-term
opportunities are significantly more mature”.
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What this means for automotive supply chains
For automotive supply chains, the pivot by battery
manufacturers and energy companies towards energy storage introduces a new
layer of demand uncertainty and portfolio complexity. OEMs that had previously
planned around rapidly rising EV volumes and tightly allocated battery capacity
now face a landscape in which some EV battery output is being diverted to
stationary storage.
And for logistics service providers, the shift reinforces
the need for network flexibility and cross-sector capability. LSPs will have to
keep a close eye on the balance between EV battery production and stationary energy
storage in order to inform strategy and effectively allocate resources.
While movement of EV batteries has different requirements to
transporting other parts (hazardous good compliance, for example), so too do
the logistics requirements of EV battery movement and stationary storage
differ. Stationary storage does not require the same high-frequency, direct-to-production
deliveries used in vehicle assembly plants. Instead, logistics providers would
support fewer but larger and more complex movements, often involving
coordination with construction schedules, utilities and EPC contractors.
Therefore, there’s a lot to consider if an LSP were looking to follow the trend
of pivoting from EV battery production to energy storage.
Overall, this pivot signals a move away from linear,
automotive-only battery supply chains towards more diversified, risk-managed
ecosystems, where agility and visibility across sectors become as important as
scale.
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