Ford Motor Co. canceled a 9.6 trillion won ($6.5 billion) battery agreement with LG Energy Solution Ltd. after the US automaker rolled back its electric vehicle ambitions.
Ford notified LG of the canceled order on Wednesday, the South Korean company said in a regulatory filing in Seoul. The amount is equivalent more than a third of LG’s total revenue last year.
LG is the latest casualty of Ford’s retrenchment in EVs — the US carmaker recently said it would take $19.5 billion in charges tied to the business and that it would scrap plans to make an electric F-Series truck. The company is also breaking up its US battery venture with Korea SK Innovation Co.’s battery unit SK On.
LG Energy shares slumped as much as 7.6% in on Korea Exchange, while its parent LG Chem Ltd. plunged 8.5%. SK Innovation also slid 3.9% along with its battery manufacturer peers.
Ford’s announcement this week was one of two major signals the EV era is entering a more uncertain, more contested phase. The European Commission backed away from what had been the world’s most aggressive timeline for phasing out internal-combustion engines, granting manufacturers and consumers more time to move off gasoline.
Ford began cutting orders from battery suppliers last year to stem its losses from EVs, people familiar with the matter said at the time.
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