Ford Walks Away From a $6.5 Billion EV Battery Deal

Ford has walked away from a $6.5 billion EV battery-supply deal with South Korea’s LG Energy Solution, tearing up a pair of contracts that were supposed to feed European-built Ford EVs well into the next decade.

LG Energy Solution disclosed the move in a regulatory filing, saying the order, worth 9.6 trillion won, has been terminated at Ford’s request. It is one of the clearest signs yet of how hard Ford is yanking the wheel on its EV strategy as it pivots toward cheaper, smaller models and leans more heavily on hybrids.

A Huge Battery Contract, Gone Overnight

The cancelled deal was inked in October 2024 and split into two long-term supply agreements. LG Energy Solution was due to build packs at its Polish plant, supplying tens of gigawatt-hours of capacity between the second half of this decade and the early 2030s. For LG, the order would have been a major anchor for European output and a way to lift utilisation at a factory that has not been running anywhere near full tilt.

Instead, Ford has told the supplier it is halting or scaling back some of the EV programs those packs were earmarked for. That lines up with a wider reset already under way. As the mix changes, the math on a multi-billion-dollar dedicated LG order no longer adds up.

Ford Chases Cheaper EVs And A Leaner European Lineup

The battery cancellation also fits with Ford’s broader effort to get its European business back on track. The company has been hinting that familiar badges may come back in very different form, including the idea that the Ford Fiesta could return as an electric car. Smaller, cheaper EVs need low-cost battery solutions, flexible sourcing and careful capital spending, not giant locked-in supply deals tied to a handful of specific models.

In Europe, Ford is also looking beyond its own walls for help. A recently announced partnership with Renault shows how serious it is about sharing platforms and powertrains to cut costs and fill gaps quickly. Stepping back from an enormous LG Energy Solution order gives Ford more room to reshape what batteries it buys, where they come from and which vehicles they support, instead of being locked into a fixed European EV cadence that no longer matches demand.

Tough Hit For LG, Signal To The Battery Industry

For LG Energy Solution, losing a customer of Ford’s size on a contract this big is a real blow. The company now has to find new outlets for capacity it expected to have spoken for through at least the early 2030s, at a time when Western automakers are generally slowing EV rollouts and scrutinising every long-term commitment.

Ford, meanwhile, is betting that more flexible sourcing and a renewed focus on affordable EVs and hybrids will matter more than sticking to its original battery roadmap. The cost of that decision is now being felt in Seoul.