Electric vehicle investment has entered a costly correction phase. According to industry analysis from Automotive Manufacturing Solutions, automakers and suppliers have already absorbed roughly $60 billion in losses as electric vehicle production volumes fall short of earlier projections.
The scale of the financial adjustment reflects how rapidly manufacturers expanded battery supply chains during the early 2020s in anticipation of sustained EV growth that has yet to fully materialize.
The impact is now reverberating across the automotive ecosystem, from battery joint ventures to supplier investment strategies. Vehicle manufacturers that once prioritized vertical integration of battery production are reassessing those plans, dissolving partnerships, scaling back factory construction, and redirecting battery capacity toward alternative markets such as stationary energy storage.
At the center of this shift are several high profile partnership changes. In December 2025, Ford Motor Company and SK On dissolved their joint venture known as Blue Oval SK in the United States. Announced in 2021, the project originally involved $11.4 billion in investment to build three battery factories capable of producing 120 gigawatt hours of battery cells annually. At full capacity, those plants were intended to supply batteries for up to 1.2 million electric vehicles per year.
Instead of operating the facilities as a joint venture, Ford will now control the Kentucky plants directly, while SK On will retain ownership of the Tennessee facility. The shift also includes a change in battery chemistry strategy. The factories were initially designed to produce nickel manganese cobalt batteries, but production is expected to pivot toward lithium iron phosphate cells, which are cheaper and increasingly favored for lower cost EV segments and stationary storage applications.
The restructuring follows mounting financial losses in Ford’s electric vehicle division. The company’s Model e unit recorded a $5.1 billion loss in 2024 after losing $4.7 billion in 2023. The division reported an additional $4.8 billion loss in 2025. The scale of these losses is particularly striking given that the Blue Oval SK facilities were largely financed by a $9.6 billion loan from the U.S. Department of Energy, one of the largest loans issued under federal programs designed to accelerate domestic EV manufacturing.
The broader supply chain is facing similar pressures. In 2024, Porsche AG decided to shut down its Cellforce battery subsidiary, resulting in at least €300 million in costs. The closure also disrupted plans for equipment suppliers such as Grob Werke, which had expected the Cellforce project to become a flagship customer for battery manufacturing equipment.
Europe is also seeing adjustments to battery sourcing strategies. Ford has ended its battery supply arrangement with LG Energy Solution in Poland for the Mustang Mach E. Battery sourcing for the vehicle has shifted to LG’s plant in Michigan. The Polish facility had also been scheduled to supply batteries for Ford’s expanding electric light commercial vehicle lineup in Europe, a supply agreement that has now been cancelled.
These developments reflect a broader shift in how automakers are managing technological risk. Rather than committing to a single propulsion pathway, several manufacturers are maintaining multiple powertrain strategies simultaneously.
Honda Motor Co. provides a clear example. The company recently agreed to buy out its partner LG Energy Solution from their battery joint venture in Ohio for $2.8 billion. The facility was originally designed to produce batteries for electric vehicles under Honda and Acura brands as part of a $3.5 billion project announced in 2022.
At the same time, Honda is expanding hybrid vehicle production and has reduced its planned EV investment by more than $20 billion through 2030. Hybrid vehicles require significantly smaller battery packs than fully electric models, suggesting that the Ohio facility may partially pivot toward battery production for stationary energy storage systems rather than exclusively supporting EV manufacturing.
The company has also recorded a $1.7 billion write off tied to weaker than expected EV performance and has ended its fuel cell development partnership with General Motors. Honda intends to continue developing hydrogen fuel cell technology independently, reinforcing a diversified powertrain strategy that includes hybrids, internal combustion engines, battery electric vehicles, and hydrogen systems.
This multi pathway approach mirrors strategies pursued by Japanese peers such as Toyota Motor Corporation, which has consistently maintained parallel development of internal combustion engines, hybrids, battery electric vehicles, and hydrogen fuel cells rather than concentrating exclusively on battery electrification.
Meanwhile, Stellantis has also significantly revised its battery manufacturing plans. The company cancelled two planned battery factories in Germany and Italy that were part of its Automotive Cells Company joint venture. Instead, Stellantis will source cells from an existing ACC plant in France and from a new lithium iron phosphate battery plant in Spain developed in partnership with CATL.
The automaker is also reportedly preparing to withdraw from another battery joint venture in North America with Samsung SDI. These changes follow a $26 billion write off related to electric vehicle investments. Stellantis has already agreed to sell its 49 percent stake in the NextStar Energy battery plant in Canada to its partner LG Energy Solution, a facility originally developed with more than C$5 billion in investment.
As automakers reassess electric vehicle production volumes, a secondary shift is emerging in how battery capacity will be used. Several manufacturers now plan to redirect battery output toward energy storage systems. Ford, Honda, and Stellantis have all indicated that part of their battery production could supply stationary storage markets, including the rapidly expanding demand for energy storage supporting artificial intelligence data centers.
This diversification reflects two intersecting trends. First, stationary energy storage markets are expanding rapidly as power grids integrate larger volumes of intermittent renewable energy. Second, artificial intelligence infrastructure is driving substantial growth in electricity demand from hyperscale data centers that require battery systems for grid stability and backup power.
Battery manufacturers are exploring additional applications beyond vehicles. LG Energy Solution is reportedly evaluating smaller battery cell formats for robotics, particularly as humanoid robots begin to appear in industrial manufacturing environments including automotive production lines.
These shifts illustrate how rapidly the electric vehicle supply chain expanded during the early 2020s and how sensitive that ecosystem is to demand projections. Battery factories require billions of dollars in capital investment and years of construction before reaching full production. When vehicle demand slows, those assets must either be repurposed or risk becoming underutilized.
