EV Battery Reshoring Retrenches: BlueOval SK Dissolved and $9.6B DOE-Backed Capacity Repurposed as EV Demand Stalls

EV Battery Reshoring Retrenches: BlueOval SK Dissolved and $9.6B DOE-Backed Capacity Repurposed as EV Demand Stalls

The counterweight to the semiconductor buildout: the IRA-era EV/battery reshoring wave is visibly unwinding. Ford and SK On dissolved their BlueOval SK battery joint venture (confirmed December 2025, expected to finalize Q1 2026) — unwinding what was announced in September 2021 as "the largest-ever manufacturing commitment in company history," a planned $11.4 billion investment across three plants (one Tennessee, two Kentucky). Under the dissolution, Ford's subsidiary takes the two Kentucky plants; SK On takes the Tennessee plant and will supply Ford while also pivoting the capacity to other customers, "including for stationary energy storage systems." The reason is demand, not execution: after the federal $7,500 EV tax credit ended September 30 and with Ford's Model e division having lost $5.1B in 2024 and $4.7B in 2023, "Ford currently does not require the additional battery production capacity it originally had anticipated.¹"

The policy money was real — the DOE closed a $9.6 billion direct loan to BlueOval SK in December 2024, the largest ever under the Advanced Technology Vehicles Manufacturing program — and the capacity now gets repurposed rather than idled (Ford separately announced converting its Hardin County, KY plant toward energy-storage batteries with ~1,500 layoffs, per Kentucky Lantern). GM likewise announced scaling back EV battery production in October with thousands of job cuts, pausing its Ohio and Tennessee Ultium Cell plants (production expected to resume by mid-2026). The policy floor dropped too: the administration announced CAFE-standards rollback at a White House event attended by Ford's CEO.

Why this matters for the reshoring thesis: it's the cleanest natural experiment separating policy-pulled capacity from demand-pushed capacity. The same quarter that Amkor doubled its customer-prepaid Arizona packaging campus (see Amkor Doubles Down: Peoria Campus to $12B on NVIDIA Prepayment as Phase 1 Cleanroom Commitments Sell Out) and TSMC layered another $100B onto Arizona (see SK Hynix Denies Buying Intel's Ohio Campus; TSMC's Texas Plan Hangs on a 48D Credit With a Dec 31 Construction Deadline), the battery cohort that predated the AI demand wave is dissolving JVs, converting plants to grid storage, and pausing lines. Reshoring capex follows the paying customer — AI/semis have one; post-incentive EVs don't. The Census data corroborates: transportation-equipment factory construction was down just 0.2% YTD (flat, not collapsing) but chemical/food/plastics subcategories tied to non-EV demand are the stable ones (see US Manufacturing Construction: First Monthly Increase Since January — But Still Down ~19% YoY, and Data Centers Carry Everything).