Nissan Partners with Ford-SK On for U.S. Battery Supply to Boost EV Production

Nissan Motor Co. is nearing a deal to source electric vehicle (EV) batteries in the U.S. from a joint venture between Ford Motor Co. and South Korea’s SK On, a move aimed at navigating new tariffs and revitalizing EV production. According to a recent Bloomberg report, this collaboration could reshape the EV landscape by strengthening domestic supply chains and supporting American jobs amidst a challenging market.

Addressing Tariff Challenges with Local Sourcing

The partnership comes as a response to President Donald Trump’s 25% tariff on imported cars and auto parts, which has pushed automakers to rethink their strategies. Nissan’s decision to procure batteries stateside is a direct effort to avoid these tariffs, as confirmed by sources familiar with the matter in the Bloomberg article. For Ford and SK On, supplying Nissan will help maximize the output of their new BlueOvalSK factory in Kentucky, which is set to produce batteries for Ford’s E-Transit electric commercial van. This factory, initially focused on smaller-scale production, stands to benefit from increased demand, ensuring better utilization of its resources.

Impact on EV Production and Industry Trends

The deal signals a broader trend in the EV industry: automakers are scaling back ambitious plans due to slumping demand while seeking cost-effective solutions. Ford, for instance, is reducing its EV spending by $12 billion and canceling a large electric SUV project in favor of more affordable models expected in 2027.

Meanwhile, Nissan is also adjusting its plans, having announced in March its intent to source U.S.-made batteries from SK On for a new EV to be assembled in Canton, Mississippi, starting in 2028. This collaboration could accelerate those timelines and provide a lifeline for both companies as they navigate a $5.5 billion loss in Ford’s EV division this year alone—a figure that could have reached $5.5 billion without strategic cuts.

Ford’s goal, as stated in the Bloomberg report, is clear: to create “a capital efficient business and domestic supply chain for electric vehicles that will support American jobs.” This partnership with Nissan aligns with that vision, ensuring the Kentucky plant operates at higher capacity while reducing reliance on imported components—a critical move given Ford’s projected $2.5 billion hit from tariffs, which it aims to mitigate by $1 billion through such initiatives.

Economic and Operational Benefits for EV Owners

For EV owners and enthusiasts, this development could mean more stable pricing and availability of vehicles like the E-Transit van, which relies on BlueOvalSK batteries. By localizing production, Nissan and Ford can reduce costs associated with tariffs and international shipping, potentially passing savings on to consumers. Additionally, a stronger domestic supply chain may lead to faster production cycles, addressing delays that have frustrated buyers amidst the EV market slowdown. The Kentucky factory, supported by a $9.2 billion loan from the U.S. Department of Energy in 2023, underscores the government’s push for self-sufficient EV manufacturing—a trend that could bolster the industry’s long-term resilience.

Looking Ahead: A Collaborative Future

As the EV sector grapples with economic headwinds, partnerships like this one between Nissan, Ford, and SK On highlight the importance of collaboration. By sharing resources and focusing on domestic production, these companies are not only addressing immediate challenges but also laying the groundwork for a more sustainable EV ecosystem. For EV enthusiasts, this means a future with more accessible, American-made electric vehicles, supported by a supply chain built to withstand global uncertainties.

Photos courtesy of Nissan