DEEP RESEARCH · Battery Supply Chain

U.S. battery strategy reset: Ford cancellations and the narrow opening for Chinese technology

Reading the Korea-U.S. battery alliance recalibration through OBBBA, CATL licensing, and LMR

Published: 2025-12-27 · Industry and policy research · Original Naver Blog post

0. Bottom line first

Official fact: The source describes Ford's cancelled Turkey JV with LG Energy Solution as a roughly KRW 9.6tn, USD 6.5bn contract cancellation. It treats the BlueOval SK restructuring with SK On in the same cost and technology-reset context.

Interpretation: This is less about excluding Korean battery companies and more about U.S. automakers moving from expensive NCM dependence toward technological agnosticism across LFP, LMR, and ESS.

1. Why Ford stepped away

The Ford-Korean battery alliance originally relied on high-nickel NCM's energy density and long driving range. But mainstream consumers wanted price parity with internal-combustion vehicles more than maximum range, and expensive NCM was difficult for Ford's E-Transit and affordable EV strategy.

Official fact: NCM is exposed to nickel and cobalt price volatility and has high manufacturing cost. LFP has lower energy density, but is cheaper and has stronger fire safety.

Interpretation: The stated reason of demand reassessment reads like an admission that NCM is too expensive for mass-market models.

In the BlueOval SK restructuring, the source says Ford takes over and independently operates the Kentucky plant, while SK On independently operates the Tennessee plant. Ford is seeking flexibility to repurpose plants, move into ESS, or license LFP technology rather than remain locked into an exclusive battery-manufacturer alliance.

2. OBBBA's paradox: closed gate, narrow opening

Official fact: The source says OBBBA repealed IRA Section 30D, the new-EV purchase tax credit of up to USD 7,500, effective September 30, 2025.

Interpretation: If the consumer subsidy disappears, automakers have less reason to use expensive non-Chinese batteries merely to satisfy FEOC rules. The source presents GM's August 2025 plan to import CATL LFP batteries for the next Bolt EV as an example of this regulatory gap.

Official fact: Section 45X production tax credits remain or are strengthened, and OBBBA upgrades FEOC to PFE. Chinese government ownership of 25% or more, board control, or contractual effective control can disqualify subsidies.

The Ford-CATL Marshall, Michigan project survives because OBBBA includes a grandfather clause for technology license agreements signed before July 4, 2025. Ford can keep 100% plant ownership while using CATL technology.

3. Politics: transactional isolationism and a hard-line Congress

The source frames Trump 2.0 as transactional isolationism. It can maintain or raise 100% EV tariffs and 25% battery tariffs while taking a practical view if a project builds factories and hires workers in the United States. But implementation still blocks Chinese ownership and control.

4. LMR and limited Chinese entry

LMR batteries reduce expensive cobalt and nickel while lifting manganese to 60-70%. The source says LMR targets roughly 33% higher energy density than LFP while lowering manufacturing cost versus NCM enough to compete with LFP.

Official fact: The source says GM and LG Energy Solution are developing LMR batteries with a 2028 commercialization target.

Interpretation: Ford's NCM cancellation may reflect a decision to skip expensive NCM capacity now and move later toward LMR or other next-generation low-cost chemistries.

5. Korean battery company response

LG Energy Solution is described as responding to the Ford volume cancellation by expanding Mercedes-Benz supply, accelerating cylindrical 46-series cells for customers such as Tesla, developing LFP, and strengthening ESS. ESS is linked to rising AI data-center power demand.

SK On gains more freedom after the BlueOval SK restructuring to diversify beyond Ford toward Hyundai, Kia, and other automakers. The Korean strategy is not to fight Chinese LFP purely on price, but to shift the field with LMR, high-voltage mid-nickel, solid-state, and other technologies balancing cost and performance.

6. Investor checkpoints

• Watch how the U.S. Treasury finalizes PFE and effective-control guidance at the end of 2025.
• The key question is whether CATL technology licensing expands to new contracts or remains limited to grandfathered exceptions like Ford.
• Track LGES and GM's 2028 LMR commercialization roadmap, and the pace of Korean 46-series and ESS revenue conversion.
• The current situation is better understood as a cold recalibration for cost efficiency, not the collapse of the Korea-U.S. battery alliance.