Why Ford scrapped a $6.5B battery deal with LG Energy
What's the story
Ford has scrapped a 9.6 trillion won ($6.5 billion) battery deal with South Korea's LG Energy Solution, the latter announced in a regulatory filing in Seoul. The decision comes as part of Ford's recent move to scale back its electric vehicle (EV) ambitions and cut costs by reducing orders from battery suppliers. The canceled order amount is more than a third of LG's total revenue last year.
Strategic shifts
Ford's EV strategy faces major setbacks
The cancellation of the battery deal is just one of many changes in Ford's EV strategy. The US automaker has also announced a $19.5 billion charge tied to its EV business and scrapped plans for an electric F-Series truck. Further, it is dissolving its US battery partnership with South Korea's SK Innovation Co, signaling a major shift in its approach toward electric vehicles.
Market reaction
Ford's decision impacts LG Energy's stock
The news of the canceled battery deal had an immediate impact on LG Energy's shares, which fell 0.6% to close at 415,500 won today. The market reaction reflects concerns about the potential implications for battery suppliers like LG Energy.